Following his retirement in 2006, Greenspan's policy legacy faced intense scrutiny after the collapse of the domestic housing market. The subsequent financial crisis plunged the nation into the worst recession since the Great Depression of the 1930s. The Financial Crisis Inquiry Commission, which investigated the collapse, concluded that "more than 30 years of deregulation and reliance on self-regulation by financial institutions, championed by former Federal Reserve [chair] Alan Greenspan and others … had stripped away key safeguards, which could have helped avoid catastrophe."

In response to these findings, Greenspan acknowledged to congressional investigators that he had "made a mistake" in assuming that commercial banks could perfectly regulate their own risk exposure. However, he strongly defended his core principles and sought to explain the crisis through the lens of human nature and market psychology. In his 2013 book, The Map and the Territory, Greenspan argued that traditional economic forecasting models were consistently blind to the "irrational risk-taking" that feeds speculative asset bubbles. He noted in an interview that year that "bubbles go up very slowly as euphoria builds," but crash violently once fear hits, admitting that he was "sort of intellectually shocked" by this sudden shift in market behavior.

After stepping down from the Fed, Greenspan remained highly active in public life. He authored a memoir and two other books, while continuing to provide regular economic commentary on television. His dedication to defending the institutional integrity of the nation's financial systems remained a central focus of his later years, leading him to speak out against executive overreach.

In January 2026, Greenspan joined fellow former Federal Reserve chairs Ben Bernanke and Janet Yellen to issue a strong defense of the central bank's constitutional role. The three former leaders issued a joint statement condemning what they characterized as an "unprecedented" attempt by Donald Trump's presidential administration to weaken the independence of the Fed. This intervention occurred after the Department of Justice launched a controversial criminal investigation into Jerome Powell, who chaired the bank from 2018 until May 2026 and had been a frequent target of executive pressure.

Greenspan and his colleagues cautioned that political attacks on the central bank carry severe systemic risks, warning that historically, similar prosecutorial attacks in other nations had resulted in highly negative consequences. They emphasized that compromising the independence of the Federal Reserve would drive up the cost of borrowing for the federal government and private citizens alike, undermining the nation's long-term fiscal health. Greenspan’s passing marks the end of a historic era of economic leadership committed to free-market growth and the protection of America's financial institutions.

Sources: * Federal Reserve Board of Governors * Financial Crisis Inquiry Commission (Official Report on the 2008 Financial Crisis) * U.S. Department of Justice (Administrative Records regarding the Federal Reserve)