Former Federal Reserve chief Alan Greenspan said recent credit turmoil reminded him of 1987 and 1998 market crises.
"The behaviour in what we are observing in the last seven weeks is identical in many respects to what
Former Federal Reserve chief Alan Greenspan
we saw in 1998, what we saw in the stock market crash of 1987," the Wall Street Journalquoted Mr Greenspan as saying in its online edition today.
Hedge fund Long-Term Capital Management controlled $100 billion of assets in 1998 but collapsed in the wake of a Russian debt crisis, wreaking havoc in many derivatives markets.
Mr Greenspan took over as Fed chief shortly before the Dow Jones share index slumped 23 per cent in a day in October 1987.
Elsewhere, Sweden's central bank raised interest rates by a quarter point to 3.75 per cent today and stuck to its assessment that more tightening would be needed, but it said market unrest was putting some downward pressure on an otherwise buoyant economy.
The Riksbank said troubles stemming from the US home loan market were expected to subdue growth to some degree.
Forecasts for interest rates have altered dramatically since the credit crisis, stemming from mass defaults on US subprime mortgages lent mainly to poor people, prompted banks to clam up on lending as they strive to calculate exposure to the sector.
The European Central Bank, Bank of England and their equivalents in Australia and Canada all left rates on hold this week. Until recently, they had all been expected to tighten policy sooner rather than later.
ECB President Jean-Claude Trichet said today his bank was still poised to act on inflation risks.