Paul A. Volcker

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Paul A. Volcker

Paul A. Volcker was the chairman of the U.S. Federal Reserve from August 1979 through 1987, when he waged a successful war against rising U.S. inflation, and was the head of the President's Economic Recovery Advisory Board under Barack Obama from November 2008 to late January 2011, when he resigned. President Obama named him to the newly created position to help create jobs and bring stability to the ailing U.S. financial system.

He died on December 8, 2019, at the age of 92.[1]

On January 21, 2010, President Obama proposed bank regulations which he named "The Volcker Rule".

Volcker was named to the FDIC Advisory Committee on June 3, 2011.[2]

Volcker believed strongly in the dangers of inflation and the virtues of frugality, often flying coach and vacationing in a cabin in Maine rather than in Bermuda. He was not a fan of such financial industry innovations as credit-default swaps and quipped that the best new financial product in recent decades was the automated teller machine.[3]

Volcker Rule[edit]

A Bloomberg report out in late June 2010, citing a person close to Volcker, said the former Federal Reserve chairman was disappointed with what he considered to be a diluted final version of the rule that bears his name. Initially, the Volcker rule would have banned banks from running private equity and hedge funds but last minute congressional negotiations aimed at winning Republican support led to a compromise that allows banks to invest up to 3 percent of their capital in such funds. Volcker was said to be content with language that bans banks from trading with their own capital.[4]

Volcker said in a statement released June 28 that the bill agreed upon by congressional negotiators provides a constructive legal framework for reform of the financial system. He said that among the bill's provisions "are strong restraints on proprietary trading by commercial banking organizations, a point that has been of particular interest to me."[5]

In January 2011, many of the big investment banks on Wall Street testified to Congress against the Volcker rule opposing the prohibition of any banking activity that doesn't directly service the customer. These activities include proprietary trading, investment banking advisory services as well as hedge fund or private equity involvement. [6]


Volcker worked as a research assistant in the research department of the New York Fed during the summers of 1949 and 1950. He returned to the New York Fed as an economist in the research department in 1952, and became a special assistant in the securities department in 1955. Two years later, he resigned to become a financial economist at Chase Manhattan Bank.

In 1962, he joined the Treasury as Director of the Office of Financial Analysis, and in 1963 he was appointed Deputy Undersecretary for Monetary Affairs. In 1965, he rejoined Chase Manhattan as vice president and director of forward planning.

From 1969 to 1974, he was Undersecretary of the Treasury for Monetary Affairs.

After leaving the Treasury, Volcker became senior fellow at the Woodrow Wilson School of Public and International Affairs at Princeton University for the 1974-75 academic year.

He was named chairman of the Board of Governors of the Federal Reserve System by President Jimmy Carter, and was sworn in on Aug. 6, 1979. He served until Aug. 11, 1987, including under President Ronald Reagan.

Volcker became Fed chairman in 1979 during a time of inflation and high unemployment, known as stagflation. He helped tame inflation by raising interest rates, but that move helped trigger the economic recession of the 1980s. He was later credited with reviving the economy by getting inflation under control.[7]

In remarks to The New York Times, one of Volcker's successors, former Federal Reserve Chairman Ben Bernanke, said Volcker "personified the idea of doing something politically unpopular but economically necessary." [8]

His reputation for integrity also made him a logical choice as an independent arbiter after he left the Fed. In one such position, he oversaw the reclamation of deposits held by Swiss banks that had failed to return the funds to families of Holocaust victims. The process resulted in a settlement of $1.25 billion. Separately, he investigated the United Nations' oil-for-food program in Iraq, corruption at the World Bank and lapses by Enron's auditor, Arthur Andersen. [9]

Paul Volcker's first wife, Barbara, died in 1998. He married his long-time assistant, Anke Dening, in February of 2010. Volcker was 82 at the time. Dening had worked for Volcker for over 20 years. [10]


Volcker graduated from Princeton University in 1949. He earned an M.A. in political economy from Harvard University in 1951 and then attended the London School of Economics from 1951 to 1952 as a Rotary Foundation Ambassadorial Fellow.