Alan Greenspan today warned that the current stock market decline, resulting from investors' fears over corporate accounting scandals, would affect consumer spending. The Federal Reserve chairman told the Senate Banking Committee that broader corporate governance reforms are needed, but "we should keep in mind that regulation and supervision of our financial markets need to be flexible enough to adapt to an ever-changing and evolving financial structure."
Overall, Mr. Greenspan said the economic fundamentals are in place "for a return to a sustained healthy growth."
His comments did not revive the slumping market. The Dow Jones industrial average closed down 165.66, or 1.92%, at 8,473.53; the S&P 500 was down 17.92, or 1.95%, to close at 900.02; and the Nasdaq composite ended down 7.33, or 0.53%, at 1,375.29. All numbers are preliminary.
