Greenspan urges banks to rely on risk management

US - Federal Reserve Chairman Alan Greenspan said Friday that commercial banks and banking regulators need to rely more on the emerging field of risk management to control loan defaults during periods of economic weakness.

Greenspan said it was only human nature for banks to get overconfident about their lending practices during boom times and then to sharply retreat from making loans when the economy weakens.

"To the majority of banks, the environment of contagious optimism makes more and mo

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