Testimony of Chairman Alan Greenspan
Condition of the U.S. banking system
Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate
June 20, 2001

(...)

"There are, I believe, two salient points to be made about the current state of the banking system. First, many of the traditional quantitative and qualitative indicators suggest that bank asset quality is deteriorating and that supervisors therefore need to be more sensitive to problems at individual banks, both currently and in the months ahead.

<font color="FF0000">Some of the credits that were made in earlier periods of optimism--especially syndicated loans--are now under pressure and scrutiny.</font>

(...)

This potential for an improved reaction to cyclical weakness, and better risk management, is being tested by the events of recent quarters and may well be tested further in coming quarters.

(...)

The rapid increase in loans, though typical of a normal expansion of the economy, was unusual in that it was associated with more than a decade of uninterrupted economic growth.

As our economy expanded, business and household financing needs increased and projections of future outcomes turned increasingly optimistic.

In such a context, the loan officers whose experience counsels that the vast majority of bad loans are made in the latter stages of a business expansion, have had the choice of (1) restraining lending, and presumably losing market share or (2) hoping for repayment of new loans before conditions turn adverse.

Given the limited ability to foresee turning points, the competitive pressures led, as has usually been the case, to a deterioration of underlying loan quality as the peak in the economy approached.

Supervisors have had comparable problems. In a rising economy buffeted by competitive banking markets, it is difficult to evaluate the embedded risks in new loans or to be sure that adequate capital is being held. Even if correctly diagnosed, making that supervisory case to bank management can be difficult <font color="FF0000">because, regrettably, incentives for loan officers and managers traditionally have rewarded loan growth, market share, and the profits that derive from booking interest income with, in retrospect, inadequate provisions for possible default.</font>

(...)

When the economy begins to slow and the quality of some booked loans deteriorates, as in the current cycle, loan standards belatedly tighten. New loan applications that earlier would have been judged creditworthy, especially since the applications are now being based on a more cautious economic outlook, are nonetheless rejected, when in retrospect it will doubtless be those loans that would have been the most profitable to the bank."

***Dies ist ein sehr wichtiger Punkt. Greenspan möchte, dass durchfinanziert wird, wie bisher, da sich die Kredite, die heute nicht vergeben werden, später als hoch profitabel heraustellen würden, falls sie vergeben würden

"Such policies are demonstrably not in the best interests of banks' shareholders or the economy. They lead to an unnecessary degree of cyclical volatility in earnings and, as such, to a reduced long-term capitalized value of the bank. More importantly, such policies contribute to increased economic instability.

<font color="FF0000">***Der Schlüsselsatz! Nur wenn permanent durchfinanziert wird, bleibt die gesamtwirtschaftliche Stabilität erhalten. Von den Bankprofiten ganz abgesehen... Er appelliert an den alten Bentham'schen Utilitarismus: Was für jeden einzelnen gut ist, muss auch für alle gut sein. NUR: Er setzt damit das Interesse von Gläubigern und Schuldnern gleich, was klar erkennbar auf eine Heilslehre hinausläuft ("wo die Wölfe neben den Schafen weiden...")</font>

(... mit Beispielen aus der jüngsten Finanzkrisengeschichte...)

All of this might have been the result of idiosyncratic events from which generalizations should not be made. Perhaps. But at the same time another, more profound development of critical importance had begun: the creation at the larger, more sophisticated banks of an operational loan process with a more or less formal procedure for recognizing, pricing, and managing risk.

***Demnach lautet sein Modell: Wenn das Risk Management funktioniert, kann es kein Risiko geben. Er unterscheidet nicht zwischem dem Risiko, dass aus dem Markt selbst kommt und dem Risiko, das aus dem Kreditsektor kommt. Wird letzteres ausgeschlossen, kann dies nur bedeuten, dass ein Martkrisiko nicht durchschlagen kann, sobald es ein Kreditmanagementrisiko gibt. Wenn es ein Marktrisiko gibt, muss das Kreditmanagementrisiko es ausschalten, womit es auch kein Marktrisiko geben kann.

<font color="FF0000">Klassischer Zirkelschluss also nach dem Motto: Mein Haus kann abbrennen. Ich kann dieses Risiko ausschließen, indem ich eine Versicherung abschließe. Habe ich eine Versicherung abgeschlossen, kann mein Haus auch nicht mehr abbrennen.</font>

(... dann noch Hinweis auf Basel II als seligmachende Einrichtung...)

Immerhin hat sich Greenspan als braver Debitismus-Soldat erwiesen: Neue Kredite müssen sein, damit die alten nicht verrecken. ;-)

Gruß

d.



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