Speaking in an interview with the Financial Times on Monday, former Fed Chairman Alan Greenspan said the chance of a recession in the United States was above 50% but that probability was pulling back somewhat.

Greenspan also said it was too soon to tell whether the worst of the financial crisis was over, and that any recovery would depend on a turnaround in the U.S. housing markets.

The former Fed chief also warned that bursting asset price bubbles was risky business and that financial institutions might be better off ensuring a strong capital base to deal with incoming financial shocks.

He also said that financial turmoil was a necessary side-effect in periods of rapid innovation and growth.

By Erik Kevin Franco and edited by Nancy Girgis