"While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late," Greenspan said. "I really didn't get it until very late in 2005 and 2006."

Greenspan, 81, has received credit for leading the economy to its longest-ever expansion in the 1990s and many economists have praised his handling of a sequence of crises.

Indeed, some have hailed him as the greatest central banker in US history.

However, others criticize Greenspan for sowing the seeds of successive asset bubbles, first in US stock markets and later in housing. He has also come under fire for suggesting during his Fed tenure that adjustable rate mortgages could be a cost-saving financing option for many borrowers, just shortly before the Fed embarked on a long push to move rates higher.

Many critics charge that current subprime problems and the prolonged housing slump are the result of the fizzling of a residential real estate frenzy fueled by this prolonged period of cheap borrowing costs.

But Greenspan said those critics fail to grasp that low rates were necessary to breathe life into an economy that was reeling from multiple shocks.

"They are mistaken," he said. "It was our job to unfreeze the American banking system if we wanted the economy to function. This required that we keep rates modestly low."