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Mr. Greenspan said it would take an unwieldy army of bank examiners to even begin to spot problems ahead of time because financial firms have grown so large and complex, but such a massive bureaucracy would succeed only in stifling innovation and growth.

Right now, regulators have limited resources and have to “guess which of the assertions of pending problems or allegations of misconduct” should be investigated and regulated.

“This dilemma means that, in the aftermath of an actual crisis, we will find highly competent examiners failing to have spotted a Madoff,” Mr. Greenspan said, referring to convicted Ponzi scheme operator Bernard Madoff.