Greenspan says banking system is ‘strong, vibrant, profitable’

WASHINGTON — The U.S. banking system, having weathered a recession and the bankruptcies of several big corporations, is in very good shape, Federal Reserve Chairman Alan Greenspan said Tuesday.

Technology and the use of sophisticated financial instruments to hedge risks have helped banks navigate through sometimes difficult economic and financial waters, the Fed chief said in remarks to the American Bankers Association’s annual convention in New York. A copy of his remarks was distributed in Washington.

“By any measure, banking in the United States is strong, vibrant and profitable,” Greenspan said. “Under the circumstances, the present health of banking is a dramatic testament to both the management skills of bankers and the ability of regulators and legislators to adopt, albeit slowly, to change,” he said.

Greenspan, in his speech, did not discuss the state of the U.S. economy or the future course of short-term interest rates.

The Federal Reserve, citing signs of improvement in the economy, boosted short-term interest rates for a third time this year in September. That raised a key rate to 1.75 percent.

Some economists believe the Fed will probably increase rates for a fourth time on Nov. 10.