AMSTERDAM, Sept 29: The world’s major central banks are less likely to influence long-term interest rates, which partly explains the build-up of excess liquidity in debt markets, former Federal Reserve chairman Alan Greenspan said on Saturday.

“The Fed, ECB, BoE and BoJ - all are losing their ability to influence longer term rates,” Greenspan said.

He was referring to the US Federal Reserve, European Central Bank, Bank of England and Bank of Japan.

Greenspan was speaking in Amsterdam at an event hosted by ING as part of a tour to promote his new book, “The Age of Turbulence: Adventures in a New World”.

Greenspan has been criticised for keeping interest rates too low for too long when leading the Federal Reserve until 2004. Critics said he sowed the seeds of the US housing and global liquidity bubbles, adding that the Federal Reserve failed when it tried to contain inflation and nudge long-term rates higher in 2004.

“In 2004, we failed. Our purpose was to fight inflation and the fact is that we tightened but couldn’t move long-term rates up,” Greenspan told an audience of ING analysts and clients.

Greenspan’s remarks on the US housing market woes seemed slightly stronger than those previously during his book tour.

“It is clear that the decline in housing starts is not over and the decline in housing prices is not over,” he said.

Asked about the dollar’s recent decline in value against other major currencies, Greenspan offered a long-term perspective on the dollar’s strength.

“You’ll find that GDP will grow far faster in the developing world over the next 25 years than the developed world,” he said.

—Reuters