In prepared testimony to be delivered to the House Oversight Committee, former Fed Chairman Alan Greenspan called for more regulation of the financial system to address the breakdown of the markets.

"What went wrong with global economic policies that had worked so effectively for decades? The breakdown has been most apparent in the securitization of home mortgages," the former policy-maker said.

The former policy-maker suggested that investors should retain some of the responsibility associated with packaging investments into a security as to ensure the proper pricing of their products.

He also says the $700 billion dollar rescue package was an appropriate amount, and that unemployment can be expected to move higher in the United States.

Greenspan is scheduled to speak alongside SEC Chairman Christopher Cox at 10 a.m. EDT.

By Erik Kevin Franco and edited by Nancy Girgis
©CEP News Ltd. 2008