Chicago - Derivatives increase the risk that a financial crisis will spread at a faster pace throughout the markets, Alan Greenspan, the chairman of the Federal Reserve Board, said here yesterday.

While derivatives enhance the efficiency of the financial system, if a derivatives counterparty becomes insolvent or some other crisis occurs, "the efficiency of the system created by the complexity of financial management that has emerged is likely to mean that the crisis will move much more rapidly," Greenspan said in a speech to a group of bankers.

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