Federal Reserve Board Chairman Alan Greenspan warned Tuesday that the United States is not immune to an Asia-like financial crisis.

"Before we get too comfortable, I think we should note some parallels that tend to look all too close to home," said Mr. Greenspan, who spoke via a live satellite feed to a banking convention here.

For instance, he said the U.S. economy's extraordinary performance has caused bankers to compete for new business by reducing loan spreads. "We should all be aware that such an environment tends to reduce prudence," he said. "It is exactly in such a period that your competitors-I am being diplomatic-tend to take a little too much risk for far too little return."

(Separately, Mr. Greenspan said he supports imposing a moratorium on new thrift charters for nonbanks. See story, page 2.)

The speech was Mr. Greenspan's second in less than two weeks on credit quality. Last week in congressional testimony he said tomorrow's nonperforming loans are being underwritten today.

The Fed chairman Tuesday also lashed out at the international explosion of short-term interbank credit, calling it the "Achilles' heel" of the world's financial system. Withdrawal of this short-term credit precipitated the Asian economic crisis, signaling a lack of confidence in the region, he said.

Mr. Greenspan devoted the bulk of his remarks before the Independent Bankers Association of America's annual convention to identifying the causes of the Asian crisis.

Poor practices by Asian banks triggered much of the region's economic woes, he said. For instance, he said, banks lent long and borrowed short, making them highly susceptible to interest rate changes. Also, lenders failed to sell collateral quickly.

"Nonperforming loans should be dealt with expeditiously," he said. "The sooner dubious real estate is sold and realistic prices established, the quicker will be the recovery."

Echoing remarks made Monday by Comptroller of the Currency Eugene A. Ludwig, Mr. Greenspan also complained about the quality of some foreign bank examiners. "We need independent bank examiners who understand banks, who could in effect make sound loans themselves because they understand the process," he said.

Mr. Greenspan also slammed the legal systems in developing countries, saying they fail to protect investors from unwarranted intrusions by government officials into commercial disputes. "When such statutes are weak to nonexistent, foreign creditors are more apt to flee prematurely in a pending crisis for fear of being shortchanged by domestic political authorities," he said.

Foreign countries also need to adopt accounting systems that ensure investors get an accurate picture of the health of public companies, and they must be willing to act decisively at the first signs of an economic crisis, he said.

The Fed chairman also said foreign governments should stop implicitly backing loans to private businesses and they should stop trying to enforce industrial policies.

"Events in Asia reinforce once more that while our burgeoning global system is efficient and makes a substantial contribution to standards of living worldwide, that same efficiency exposes and punishes underlying economic imprudence swiftly and decisively," he said.

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