As boss of the world’s leading central bank from 1987 to 2006 he demonstrated his willingness to move quickly, trusting his instincts as much as anything else when deciding to cut rates.
Greenspan’s pedigree was different to Ben Bernanke, the present leading man, in the current credit crunch crisis being played out in the US and global markets, where fears over bad debt exposure is preventing banks from doing business with each other.
In such circumstances Greenspan acted decisively to prevent the economy from hitting the rocks or when it looked to be heading in that direction as was the case after the dotcom bubble burst and post-9/11.
The facts speak for themselves. Between 1992 and 2001 he called six emergency interest rate meetings and five of those resulted in interest rate cuts as he moved to lessen the chances of recession in the world’s largest economy or to ease difficulties in the markets.
That was Greenspan, a business economist, with an office in Wall Street, who stayed tuned to the concerns of the business community across America.
By contrast Bernanke is a former head of economics at Princeton University who has spent most of his life as an academic.
Naturally his bias is towards economic models and his tendency is to rely on forecasts and reams of statistics to shape his decision making processes.
The contrast in backgrounds is quite sharp, and already it is becoming clear that the relatively new Fed chairman is taking a measured response to the current global credit crisis.
That problem flared again in a very real way yesterday morning when it emerged that Britain’s Northern Rock, a major mortgage lender, has had to be rescued by the Bank of England because it could not raise enough credit on the markets to fund its ongoing mortgage lending.
The bank is not insolvent, but the scarcity of money at reasonable rates in the wholesale money market is one of the key problems facing Mr Bernanke as he prepares to cut the key Fed rate next Tuesday.
Some were expecting him to move before Tuesday’s formal meeting, but as has been said his style is different to his predecessor who held the post for 20 years.
Many observers were expecting the Fed to cut rates by a full half-percent on Tuesday to ease the credit squeeze, but that is no longer certain.
Despite increasing calls for lower borrowing costs since early August, Mr Bernanke has kept his own council and the view now is that the rate cut on Tuesday will be a modest 0.25% with the expectation of two similar cuts before the year end, that will knock the key Fed rate back from 5.25% at present to 4.5% by the year end.
From an Irish and European perspective it is increasingly likely, that having held off on an interest rate hike in early September, the ECB will not be raising rates any time soon.
If the current credit crisis highlighted by Northern Rock’s difficulties yesterday start to spread then this problem assumes a whole new dimension.
Northern has 24,000 customers with deposits of €2.5bn in Ireland, and is one of the biggest mortgage lenders in Britain and if consumers start a run on some banks they regard as risky then the result could well be a very long global economic slowdown.
Then unemployment, rather than the cost of mortgage repayments, will become the bigger issue and the cost of mortgages could become secondary in the lives of the thousands who will find themselves without jobs.