The subprime blame game.

• Position: OFF THE NEWS - Brief article

After the New York Times on December 18, 2007, launched a blistering critique of the Greenspan Federal Reserve's handling of the bank regulatory front in the years prior to the subprime crisis, Washington has seen the beginnings of a backroom blame game. The two central figures in this debate: former Chairman Alan Greenspan, who retired in January 2006, and former Vice Chair Roger Ferguson, who stepped down in April 2006.

Both deserve enormous credit for presiding over the Fed during a period of extraordinary U.S. economic performance. But on the regulatory front, Fed insiders argue that the Chairman delegated responsibility for all regulatory matters to Ferguson, who at the time received high marks for his role as "chief plumber" of the U.S. central bank. For example, Ferguson represented the Federal Reserve monthly at the meeting of G10 central bankers in Basel, Switzerland, and became intimately involved with issues relating to the levels of capital adequacy for the banking sector. In the chaotic...