alan greenspan : finance - united states and global remarks by mr alan greenspan, chairman of the board of governors of the us federal reserve system, at the institute of international finance, new york, ( via videoconference ), 22 april 2002. * * * in recent weeks, economic forecasters in the united states have been debating whether an apparent turning point in the current business cycle augurs a modest or a more robust recovery in the months ahead. much less attention has been paid to a far more significant event : the impressive ability of the american economy to withstand a severe decline in equity asset values, a sharp retrenchment in capital spending, and an unprecedented blow from terrorists to the foundations of our market systems. as i outlined in congressional testimony last month, if the indications that the contraction phase of this business cycle has drawn to a close are ultimately confirmed, we will have experienced a significantly milder downturn than the long history of business cycles would have led us to expect. remarkably, the imbalances that triggered the downturn and that could have prolonged this difficult period did not fester. the obvious questions are, what has changed in our economy in recent decades to produce such resilience, and will these changes persist into the future? doubtless, the substantial improvement in the access of business decisionmakers to real - time information has played a key role. thirty years ago, the timeliness of available information varied across companies and industries, often resulting in differences in the speed and magnitude of their responses to changing business conditions. in those earlier years, imbalances were inadvertently allowed to build to such an extent that their inevitable correction engendered pronounced economic stress. the process of correcting those imbalances and the accompanying economic and financial disruptions too often led to deep and prolonged recessions. today, businesses have large quantities of data available virtually in real time. as a consequence, although their ability to anticipate changes in demand seems little improved, they, nonetheless, address and resolve economic imbalances far more rapidly than in the past. the apparent increased flexibility of the american economy arguably also reflects the extent of deregulation over the past quarter century. certainly, if the energy sector were still in the tight regulatory fetters of the 1970s, our flexibility today would be markedly less. that the relatively recently developed markets for natural gas and electric power endured the enron collapse without significant disruption was encouraging. although the terrorist attacks hit air travel especially hard, dereg

laboratory, 2020 ), https : / / www. gfdl. noaa. gov / global - warmingand - hurricanes / ; and the intergovernmental panel on climate change, managing the risks of extreme events and disasters to advance climate change adaptation ( geneva : the intergovernmental panel on climate change, 2012 ), 44 – 48, https : / / www. ipcc. ch / report / managing - the - risks - of - extreme - events - anddisasters - to - advance - climate - change - adaptation / changes - in - climate - extremes - and - their - impacts - on - thenatural - physical - environment /. - 2elevated financial losses associated with an increased frequency and intensity of extreme weather events. 4 some have described pacific gas and electric ’ s bankruptcy as the first climate - related bankruptcy of a major u. s. corporation. 5 average annual insured weather - related catastrophe losses have increased over the past decade. 6 with losses increasing, insurers are incorporating the impact of climate change into their underwriting assumptions, pricing, and investment decisions. climate change is also likely to have a notable impact on coverage availability. 7 some insurers have discontinued policies in fire - prone areas, which, in turn, is changing the costs of homeownership and the risk profiles of previously underwritten mortgages. 8 similarly, mortgages in coastal areas are vulnerable to hurricanes and sea level rise. new mortgages issued for u. s. coastal homes have, in aggregate, exceeded $ 60 billion annually in recent years. 9 recent research suggests that lenders hit by hurricanes, particularly in areas not typically affected by natural disasters, tend subsequently to securitize more of their mortgage loans, which could have higher climate risks, higher see “ billion - dollar weather and climate disasters : overview, ” national oceanic and atmospheric administration ( noaa ) national centers for environmental information, https : / / www. ncdc. noaa. gov / billions /. see russell gold, “ pg & e : the first climate - change bankruptcy, probably not the last, ” wall street journal, january 18, 2019, https : / / www. wsj. com / articles / pg - e - wildfires - and - the - first - climate - changebankruptcy - 11547820006. see “ sigma : natural catastrophes in times of economic accumulation and climate change, ” lucia