In 1998, William J. McDonough, head of the New York Federal Reserve, helped the counter-parties of Long Term Capital Management avoid losses by taking over the firm. This move was criticized by former Fed Chair, Paul Volcker and others as increasing moral hazard. Tyler Cowen concludes that "creditors came to believe that their loans to unsound financial institutions would be made good by the Fed – as long as the collapse of those institutions would threaten the global credit system." Fed Chair, Alan Greenspan, while conceding the risk of moral hazard, defended the policy to orderly unwind Long Term Capital by saying the world economy is at stake.