Speaking at an economic forum in Mexico City, Mexico, Former Fed Chairman Alan Greenspan said that while he has seen a pronounced turnaround in March, the market turmoil may get worse before a recovery sets in.

Greenspan said that he still sees downward pressures from housing, adding that "prices may only clarify themselves by the end of 2008."

Greenspan said that any regulation of the markets would be the result of political pressures and that market turmoil is a good lesson for risk managers to learn.

Greenspan said that the worst part of the financial crisis was over and that the possibility for a severe recession was greatly reduced. Greenspan also said that the U.S. economy was resilient and that the rebate cheque stimulus packages were helping U.S. retailers.

Greenspan noted that the crisis would be over when the gap between Libor and OIS was 50 basis points.

By Steve Stecyk and edited by Cristina Markham