"It's not just the United States, this is really worldwide," Greenberg said on CNBC. "We have to deal with the housing issue once and for all. It goes into credit card debt, it goes into all forms of debt."
Innovating thinking will be critical, with a worldwide approach that takes into account the needs of companies, investors and the public, he said.
"We're doing things that we've never done before, but the beauty of this time as compared to the prior Depression in '32, people are acting and the world is acting together," he said. "It's not as if we're acting in isolation."
President-elect Barack Obama's approach so far to the economic crisis drew praise from Greenberg, even though he supported Republican John McCain in this year's election.
Obama has been filling out his economic team, with New York Fed President Timothy Geithner on tap to take over at Treasury and former Treasury Secretary Larry Summers to lead the National Economic Council.
"I think that the choice of people (is) excellent. They're experienced, I think they'll do a good job," he said. "I think President-elect Obama's speech was very encouraging. I think he's very practical. We are in a crisis. You have to put ideology aside and you really have to deal with the crisis and I think he is."
But Greenberg warned the incoming administration to avoid the mistakes with Citigroup that he believes were made with the AIG bailout, which he said initially applied onerous terms in essentially nationalizing the company.
"It seems to me the role of the government in this is to try and keep a company alive, not burden it with huge interest rates, but to do a plan that recovers the cost of money to the government plus a modest override," he said. "You want to get the company back into a functioning company so it's a taxpayer and an employer. If you burden it with huge interest rate payments or you get so much equity that you drive out the private sector, what have you accomplished?"