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| | FRB: Speech, Greenspan -- Cyclicality and banking regulation -- May 10, 2002 |
 | | Cyclical financial volatility, for example, was significant from the Civil War to World War I, a period that--abstracting from some of the perverse currency rules that came from the Banking Act of 1863--was not characterized by substantial regulation and rulemaking. |
 | | As cyclical imbalances inevitably develop, the typical pattern has been an evaporation of optimism among lenders and asset holders and a herdlike propensity to seek an increase in risk premiums. |
 | | Indeed, though we are not going to eliminate cyclically correlated changes in attitudes of human beings, I am impressed by the effect that facts, historical relationships, and quantification can have on reducing such swings. |
| www.federalreserve.gov /boarddocs/speeches/2002/20020510 (2471 words) |
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