Federal Reserve Board Chairman Alan Greenspan today gave measured support to extension of the Terrorism Risk Insurance Act.[@@]
An extension of TRIA is needed because the risk of losses from terror attacks is too great for private insurance markets to handle, Greenspan told lawmakers at a hearing of the U.S. House Financial Services Committee on the state of the economy.
“I think that what Congress has got to do is to recognize it’s a trade-off,” Greenspan said. “That is, so long as we have terrorism that has the capability of a very substantial scope of damage, there is no way you can expect (the) private insurance system to handle that.”
Congress must renew TRIA despite the problems often associated with offering government support to private enterprises, Greenspan said.