Alan Greenspan, the former chairman of the US Federal Reserve who steered American monetary policy for nearly two decades, has died at age 100. His death marks the end of an era for an economist who was once described as the 'God in the machine' of American finance — but whose reputation was later tarnished by the 2008 financial crisis.
Greenspan chaired the Federal Reserve from 1987 to 2006, serving under four presidents: Ronald Reagan, George HW Bush, Bill Clinton and George W Bush. The Fed is the US central bank, responsible for setting interest rates and regulating the banking system to keep inflation in check and promote maximum employment. As its chair, Greenspan became the world's most high-profile banker, with financial markets hanging on his every public word. A sign in his office read simply: 'the buck starts here'.
“Explains who Alan Greenspan was, his role as Fed chair, his impact on the global economy, and why he matters for UK readers.”
Greenspan was born in New York City on 6 March 1926 and raised by his mother, who worked in a furniture store. He studied clarinet at the Juilliard School of Music and played in a band with legendary jazz saxophonist Stan Getz, before enrolling at New York University (NYU) to study economics. He earned bachelor's, master's and doctoral degrees — all from NYU — and spent three decades running an economic consulting firm. In 1952 he met right-wing novelist Ayn Rand, whose belief that society functions most efficiently through free markets profoundly influenced him.
Greenspan was widely credited with presiding over the longest sustained period of US economic growth in a generation. But critics argue that his faith in deregulation and easy credit fuelled the dot-com bubble of the late 1990s and the sub-prime mortgage crisis that triggered the 2008 financial crash. The Financial Crisis Inquiry Commission concluded that 'more than 30 years of deregulation and reliance on self-regulation by financial institutions, championed by former Federal Reserve chairman Alan Greenspan and others, had stripped away key safeguards'. Greenspan later acknowledged he had 'made a mistake' in believing banks could regulate themselves, but defended himself by arguing that traditional forecasting could not account for the irrational risk-taking that feeds bubbles.
For UK readers, Greenspan's legacy matters because the global financial crisis of 2008 — which originated in the US housing market — led to a deep recession in Britain, with bank bailouts, austerity and years of sluggish growth. His policies also influenced how central banks like the Bank of England operate: Greenspan's emphasis on credibility and analytical rigour shaped modern monetary policymaking. The Fed said he 'brought rigorous analytical discipline to monetary policymaking and helped establish the credibility that remains one of the Federal Reserve's most important assets'.
Q: What was Alan Greenspan's role at the Federal Reserve? As chairman of the Federal Reserve from 1987 to 2006, Greenspan was charged with safeguarding the US economy and keeping the dollar sound. He set interest rates and oversaw monetary policy, a role often described as the second most important job in the US after the presidency.
Q: Why is Greenspan considered controversial? Greenspan's reputation suffered after the 2008 financial crisis. Critics blame his advocacy of deregulation and low interest rates for creating the housing bubble that collapsed. He later admitted making a mistake in trusting banks to regulate themselves, though he defended his overall record.
Q: How did Alan Greenspan's early life shape his economic views? After training as a musician at Juilliard, Greenspan studied economics at NYU and became an apostle of free-market thinking, influenced by novelist Ayn Rand. His time touring with a band gave him practical insights into business, and he later ran an economic consulting firm before entering public service.
What happens next: Greenspan's death at 100 closes a chapter in economic history, but his influence endures. The Federal Reserve's current policies still reflect his emphasis on credibility, while debates over deregulation and financial stability continue to echo in the UK and beyond. No further announcements regarding his legacy are expected from the Fed, which has already paid tribute.