Greenspan: Bank nationalization may be needed

Former Federal Reserve Board Chairman Alan Greenspan said yesterday that temporary nationalization of U.S. banks may be necessary. In comments to the Financial Times, he said nationalization could be the least bad option in facilitating a restructuring of the financial system. “I understand that once in a hundred years, this is what you do,” Mr. Greenspan told the paper. He said nationalization would allow the government to transfer toxic assets into a so-called bad bank “without the problem of how to price them.” Mr. Greenspan said senior debt holders of banks should be protected “to preserve an anchor for the financing of the system.”