Cannot Quote by Alan Greenspan
“The very nature of finance is that it cannot be profitable unless it is significantly leveraged... and as long as there is debt, there can be failure and contagion.”
About This Quote
Source Speech: Remarks on Financial Stability, 2008
Profitability in finance depends on leverage; debt creates risk of failure and contagion.
In simple terms: Leverage drives profit but also risk.
Key Takeaway
Balance leverage with risk controls.
Themes
finance
risk
leverage
Mood
cautious
analytical
Type
economic
educational
When to use this quote
- banking
- investment
- policy making
Key Concepts
systemic risk
capital structure
economic cycles
Questions to Reflect On
- What safeguards can limit leverage risk?
- How do you assess optimal leverage?
A Different Perspective
Leverage can amplify losses in downturns.
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