Greenspan did offer somewhat of a mea culpa, though, noting that the regulatory system failed by not demanding financial firms hold much larger capital buffers.

Greenspan, who led the U.S. central bank from 1987 to 2006, has been criticized by some analysts who argue he kept short-term, benchmark interest rates too low for too long in the early 2000s.

The former Fed chief defended the central bank's actions, saying that the seeds of the housing boom were sown by geopolitical events that were out of the Fed's control, an argument he has presented a number of times in the past.

The fall of the Soviet Union led to hundreds of millions of workers entering the global marketplace, he said in a paper to be presented to a Brookings Institution conference.

This new market-based workforce, Greenspan said, helped push up growth in the developing world. This in turn fueled a global savings glut that drove down long-term interest rates, leading to an "unsustainable boom" in house prices, he said.

That housing boom, Greenspan stressed, was not a phenomenon in the United States alone with 20 other countries also witnessing huge run-ups in home values.

While he acknowledged that markets and regulators misread the risk embedded in the complex financial products that triggered the crisis, he said no regulator can be expected to consistently forecast if a specific product will turn toxic.

A better approach, he said, would be higher capital buffers.

"Capital and liquidity, in my experience, address almost all of the financial regulatory structure short-comings exposed by the onset of crisis," Greenspan said.

"Adequate capital eliminates the need for an unachievable specificity in regulatory fine-tuning."

Greenspan also endorsed the idea of contingent capital, or debt that converts to equity in times of distress. He said this could reverse moral hazard, the expectation of bankers and traders that the government will bail them out if their bets go awry.