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Greenspan Says Fed Asset Purchases May Not Get ‘Money Moving’

Oct. 7 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said more asset purchases by the central bank may not be enough to get “money moving” in the U.S. economy.

If the Fed increases “excess reserves and they just sit there on the asset side of commercial banks’ balance sheets not being relent, you’ve merely gone through an interesting bookkeeping exercise,” Greenspan said today at a foreign-exchange conference in New York sponsored by Bloomberg LP, the parent of Bloomberg News.

“You’ve got to break that psychology that prevents that current trillion” in reserves from being relent, said Greenspan, a paid speaker at the event.

Greenspan, 84, was chairman of the Fed from 1987 until 2006, when he was succeeded by Ben S. Bernanke.

To contact the reporters on this story: Caroline Salas in New York at csalas1@bloomberg.net; Thomas R. Keene in New York at tkeene@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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