The most powerful man in the world

By Steve Cunningham

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ALAN Greenspan has pressed the panic button and cut American interest rates in an attempt to head off looming recession.

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��Press Association

Alan Greenspan

Greenspan, 74, has for 13 years been chairman of the American Federal Reserve - equivalent of the Bank of England - which sets the interest rate of the US economy.

In that time, the great trading nations, Europe and Japan, have been hit by many financial crises, so the mighty dollar has become even more crucial to the global economy.

If America had slipped into recession, the world would have faced a catastrophic depression.
That didn't happen - and much of that can be attributed to Greenspan's control. He raised interest rates when inflation threatened to rocket and cut them when the economy seemed to slow down. His firm control ensured a time of spectacular prosperity in America.

Now, however, the alarm bells are ringing and recession threatens in the US. And, when America enters recession, the rest of the world�usually follows.

Greenspan chairs America's decision-making body on interest rates, the Federal Open Market Committee. It made an emergency cut in the key Fed Funds rate from 6.5% to 6.0%.

The action was dramatic - even two years ago when Greenspan feared America's financial system might collapse under the strain of the crisis in Russia, the Fed moved only a quarter of a point at a time.

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The effect was amazing. Within minutes, the Nasdaq and Dow financial indexes were gaining dramatically. The Nasdaq's rise, 14%, was the biggest in its 30-year history.

Greenspan has tackled crises before, notably the global stock market crash of October, 1987 - only three months after he became chairman of the Fed.
As dealers watched their screens turn red on that fateful day, Greenspan received an anguished call from Gerald Corrigan, president of the New York Fed, pleading: 'Alan, you're it. Goddamnit, it's up to you. The whole thing is on your shoulders.'

Greenspan replied: 'Thank you, Dr Corrigan,' before making a one-line statement�that reassured Wall Street that the Fed would take action if things started to get out of hand. It worked.

What of Greenspan's personal life His Jewish parents split when he was three, leaving Alan with his mother Rose, who sold furniture for a living.

He went to music college and dropped out to join a jazz band. While on tour, he became the band's book-keeper, rediscovering his love of maths.
After university he set up a consultancy until 1987 when he was invited by President Ronald Reagan to take over at the Fed.

He is on his second marriage and is said to eat only vegetables.

Among his recipes for success are:

• When there is bad news, deliver it yourself and look people in the eye.

• Be prepared for the unexpected

Whether he has bad tidings in store remains to be seen. The big question is: Can Greenspan bring about a 'soft landing' - and stop America, and the rest of the world, crashing into a full-blown recession