Greenspan Faults Hong Kong’s Market Steps

The Hong Kong Monetary Authority was wrong to buy stocks on the Hong Kong market in an effort to prop up the equity market, Federal Reserve Board Chairman Alan Greenspan said. “They won’t succeed,” Greenspan told members of the House Banking Committee. “And it erodes some of the extraordinary credibility the Hong Kong monetary authorities achieved over the years.” Hong Kong’s benchmark Hang Seng index has risen 8.8% during the last month, as the Hong Kong Monetary Authority spent at least $12.5 billion in the stock and futures markets. Even though stocks rose, it was a long-term mistake, Greenspan said.