Paul Volcker

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Paul Volcker
Chairperson of the President's Economic Recovery Advisory Board
In office
February 6, 2009 – February 6, 2011
President Barack Obama
Preceded by Position established
Succeeded by Jeff Immelt (Council on Jobs and Competitiveness)
Chair of the Federal Reserve
In office
August 6, 1979 – August 11, 1987
President Jimmy Carter
Ronald Reagan
Deputy Frederick Schultz
Preston Martin
Manley Johnson
Preceded by William Miller
Succeeded by Alan Greenspan
President of the Federal Reserve Bank of New York
In office
May 2, 1975 – August 5, 1979
Preceded by Alfred Hayes
Succeeded by Anthony Solomon
Personal details
Born Paul Adolph Volcker, Jr.
September 5, 1927
Cape May, New Jersey, U.S.
Died Script error: The function "death_date_and_age" does not exist.
New York City, New York, U.S.
Political party Democratic
Spouse(s) Barbara Bahnson (1954–1998)
Anke Dening (2010–present)
Children 2 (with Bahnson)
Alma mater Princeton University
Harvard University
London School of Economics
Religion Lutheranism

Paul Adolph Volcker, Jr.[1] (September 5, 1927 in Cape May, New Jersey - December 8, 2019 in New York City, New York) was an American economist. He was Chairman of the Federal Reserve under Presidents Jimmy Carter and Ronald Reagan from August 1979 to August 1987. He is widely credited with ending the high levels of inflation seen in the United States during the 1970s and early 1980s. He was the chairman of the Economic Recovery Advisory Board under President Barack Obama from February 2009[2] until January 2011.[3]

Early life and education

Volcker was born in Cape May, New Jersey, the son of Alma Louise (née Klippel) and Paul Adolph Volcker.[4] All of his grandparents were German immigrants.[4] Volcker grew up in Teaneck, New Jersey, where his father was the township's first municipal manager. As a child, he attended his mother's Lutheran church, while his father went to an Episcopal church. Volcker graduated from Teaneck High School in 1945.[4]

Volcker's undergraduate education was at Princeton University; he graduated in 1949. He earned his M.A. in political economy from Harvard University's Graduate School of Arts and Sciences and Graduate School of Public Administration in 1951 and then attended the London School of Economics from 1951 to 1952 as a Rotary Foundation Ambassadorial Fellow, under the Rotary's Ambassadorial Scholarships program.


In 1952 he joined the staff of the Federal Reserve Bank of New York as a full-time economist. He left that position in 1957 to become a financial economist with the Chase Manhattan Bank. In 1962, Robert Roosa, who had been his mentor at the Federal Reserve, hired him at the Treasury Department as director of financial analysis.[5] In 1963, he became deputy under-secretary for monetary affairs. He returned to Chase Manhattan Bank as vice president and director of planning in 1965.

From 1969 to 1974, Volcker served as under-secretary of the Treasury for international monetary affairs. He played an important role in President Nixon's decision leading to the suspension of gold convertibility on August 15, 1971, which resulted in the collapse of the Bretton Woods system. Volcker considers the suspension of gold convertibility "the single most important event of his career."[6] In general he acted as a moderating influence on policy, advocating the pursuit of an international solution to monetary problems. After leaving the U.S. Treasury, he became president of the Federal Reserve Bank of New York from 1975 to 1979, leaving to become the chairman of the Federal Reserve in August 1979.

In 1975, Volcker also became a senior fellow in the Woodrow Wilson School of Public and International Affairs at Princeton University.

Chairman of the Federal Reserve

Paul Volcker, a Democrat,[7] was appointed chairman of the board of governors for the Federal Reserve System in August 1979 by President Jimmy Carter and reappointed in 1983 by President Ronald Reagan.[8]

The Federal Reserve board led by Volcker is widely credited with ending the United States' stagflation crisis of the 1970s. Inflation, which peaked at 14.8 percent in March 1980, fell below 3 percent by 1983.[9][10]

The Federal Reserve board led by Volcker raised the federal funds rate, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well. Thus, the unemployment rate rose to over 10%. The economy was restored since the tight-money policy was over in 1982. According to William Silber [11] "His policy of preemptive restraint during the economic upturn after 1983 increased real interest rates and pushed Congress and the president to adopt a plan [the 1985 Gramm-Rudman-Hollings bill] to balance the budget. The combination of sound monetary and fiscal integrity sustained the goal of price stability."

However, despite the Gramm-Rudman-Hollings bill, US debt as a percentage of GDP more than doubled between 1981 and 1993.[12]

Debt to GDP ratio, 1981–1993
Debt to GDP ratio, 1993–2001

US debt as a percentage of GDP rose throughout the 1980s and early 1990s as federal spending grew; only stabilizing after 1993 as the growth of federal spending slowed relative to the growth of GDP. Federal debt was stable as a percentage of GDP between 1993 and 1997, and dropped nearly 10% as a percent of GDP after 1997.[13]

Volcker's Federal Reserve board elicited the strongest political attacks and most widespread protests in the history of the Federal Reserve (unlike any protests experienced since 1922), due to the effects of the high interest rates on the construction and farming sectors, culminating in indebted farmers driving their tractors onto C Street NW in Washington, D.C. and blockading the Eccles Building.[14]

Nobel laureate Joseph Stiglitz said about him in an interview:

Paul Volcker, the previous Fed Chairman known for keeping inflation under control, was fired because the Reagan administration didn't believe he was an adequate de-regulator.[15]

Congressman Ron Paul, well known as a harsh critic of the Federal Reserve, has offered qualified praise of Volcker:

Being in Congress in the late 1970s and early 1980s and serving on the House Banking Committee, I met and got to question several Federal Reserve chairmen: Arthur Burns, G. William Miller, and Paul Volcker. Of the three, I had the most interaction with Volcker. He was more personable and smarter than the others, including the more recent board chairmen Alan Greenspan and Ben Bernanke.[16]

Congressman Ron Paul also said in a 2011 presidential debate that, "If I had to name a Federal Reserve chairman that did a little bit of good, that would be Paul Volcker."

In 1983, Volcker received the U.S. Senator John Heinz Award for Greatest Public Service by an Elected or Appointed Official, an award given out annually by Jefferson Awards.[17]

in 2015, Volcker donated his public service papers to, Princeton University's Seeley G. Mudd Manuscript Library.[18]

Post-Federal Reserve

After leaving the Federal Reserve in 1987, he became chairman of the prominent New York investment banking firm, Wolfensohn & Co., a corporate advisory and investment firm run by James D. Wolfensohn (who later became president of the World Bank).

In 1993 he chaired the Group of 30 Report on the Derivatives market entitled "Derivatives: Practices and Principles" [19] with several appendices and a survey on how practices may have changed since the original 1993 report.[20] The Group of 30 is a "consultative group on international economic and monetary affairs." Volcker is their Chairman emeritus. [21]

In 1996, he took up the chair of the Independent Committee of Eminent Persons (Volcker Commission) to look into the dormant accounts of Jewish victims of the Holocaust lying in Swiss banks. This included a “massive accounting of Swiss bank records.” In the midst of a contentious process (the committee was formed by three Jewish representatives and three representatives of Swiss banks), he was able to bring about an agreement among the parties for a settlement of $1.25 billion.[22]

In 2000 he accepted the Chairmanship of the IFRS Trustees, the not-for-profit funding arm of the International Accounting Standards Board (later the IFRS). The IFRS is a private sector enterprise based in London which seeks to develop a single global accounting model, subject to adoption country by country under their rules of law.[23]

In April 2004, the United Nations assigned Volcker to research possible corruption in the Iraqi Oil for Food program. In the report summarizing its research, Volcker criticized Kojo Annan, son of then-UN Secretary-General Kofi Annan, and the Swiss company Cotecna Inspection SA, Kojo's employer, for trying to conceal their relationship. He concluded in his March 2005, report that "there is no evidence that the selection of Cotecna, in 1998, was subject to improper influence of the Secretary General in the bidding or selection process."[24] While Volcker did not implicate the Secretary General in the selection process, however, he did cast serious doubt on Kofi Annan, whose "management performance . . . fell short of the standards that the United Nations Organization should strive to maintain."[25] Volcker was a director of the United Nations Association of the United States of America between 2000 and 2004, prior to his being appointed to the Independent Inquiry by Kofi Annan.

As of October 2006, he is the current chairman of the board of trustees of the influential Washington-based financial advisory body, the Group of Thirty, and is a member of the Trilateral Commission. He has had a long association with the Rockefeller family, not only with his positions at Chase Bank and the Trilateral Commission, but also through membership of the trust committee of Rockefeller Group, Inc., which he joined in 1987. That entity managed, at one time, the Rockefeller Center on behalf of the numerous members of the Rockefeller family. He is former chairman and an honorary trustee of International House, the cultural exchange residence and program center in New York City. He is a founding member of the Trilateral Commission and is a long-time member of the Bilderberg Group.

In January 2008, he endorsed Democratic presidential candidate Barack Obama.[26]

On April 8, 2008, he was the featured speaker at The Economic Club of New York, and spoke about the issues and causes of the U.S. recession, and critiqued the U.S. financial system and Federal Reserve policies.[27]

Paul Volcker appeared in the Charles Ferguson's movie Inside Job. He was interviewed about current Wall Street CEO pay, claiming it is "excessive."[28]

Volcker was an economic advisor to President Barack Obama, heading the President's Economic Recovery Advisory Board.[29][30][31] During the financial crisis, Volcker has been extremely critical of banks, saying that their response to the financial crisis has been inadequate, and that more regulation of banks is called for.[32][33][34] Specifically, Volcker has called for a break-up of the nation's largest banks, prohibiting deposit-taking institutions from engaging in riskier activities such as proprietary trading, private equity, and hedge fund investments.[35][36] Volcker left the board when its charter expired on February 6, 2011, without being included in discussions on how the board would be reconstituted.[37]

On January 21, 2010, President Barack Obama proposed bank regulations which he dubbed "The Volcker Rule," in reference to Volcker's aggressive pursuit of these regulations.[38] Volcker appeared with the president at the announcement. The proposed rules would prevent commercial banks from owning and investing in hedge funds and private equity, and limit the trading they do for their own accounts.[39] According to SEC Commissioner Luis A. Aguilar, "[t]he success or failure of the Volcker Rule will depend on the manner in which banking entities comply with the letter and spirit of the rule, and on the willingness of regulators to enforce it." [40]

Volcker has been known to defy the stereotype of a Wall Street insider. A profile in The Week for February 5, 2010, claimed that Volcker doesn't even buy the conventional wisdom that "financial innovation" is necessary for a healthy economy. In fact, he likes to say, "the only useful banking innovation was the invention of the ATM."[41]

On April 6, 2010, at the New-York Historical Society's Global Economic Panel, Volcker commented that the United States should consider adding a national sales tax similar to the Value Added Tax (VAT) imposed in European countries, stating "If, at the end of the day, we need to raise taxes, we should raise taxes." [42]

World Justice Project

Paul Volcker serves as an honorary co-chairman for the World Justice Project. The World Justice Project works to lead a global, multi-disciplinary effort to strengthen the rule of law for the development of communities of opportunity and equity.

Personal life

Volcker married Barbara Bahnson, the daughter of a physician, on September 11, 1954. They had two children, Janice, a nurse and a Georgetown University graduate,[43] and James, a research assistant and a New York University graduate[44] who was born with cerebral palsy, as well as four grandchildren.[45][46][47]

Volcker is an avid fly-fisherman,[48] who recounted in 1987, "The greatest strategic error of my adult life was to take my wife to Maine on our honeymoon on a fly-fishing trip."[49][50]

Volcker is also known as "Tall Paul" for his height of 6 feet 7 inches (2.01 m),[51][52] standing exactly a foot (30 cm) taller than his first wife, Barbara, when they first met.[45] She died on June 14, 1998, having suffered from lifelong diabetes, as well as rheumatoid arthritis.

Over Thanksgiving, 2009, he became engaged to Anke Dening, a long-time assistant.[53] They married in February 2010.[54]

Honorary degrees

Volcker has received honorary degrees from several educational institutions including: Baytown Christian Academy, Hamilton College (1980), University of Notre Dame, Princeton University, Dartmouth College, New York University, University of Delaware,[55] Fairleigh Dickinson University, Bryant College, Adelphi University, Lamar University, Bates College (1989), Fairfield University (1994), Williams College (2003),[56] Northwestern University (2004), Rensselaer Polytechnic Institute (2005), Brown University (2006), Georgetown University (2007), Syracuse University (2008), Queen's University at Kingston in Canada (2009), Amherst College (2011), and at the University of Toronto (2015).[57]


  • Changing Fortunes, Paul Volcker and Toyoo Gyohten, Crown, May 26, 1992, ISBN 978-1-58648-752-2
  • Forbes Great Minds Of Business, Fred Smith, Peter Lynch, Andrew Grove, Paul Volcker (Author), Pleasant Rowland, John Wiley and Paul A. Volcker, Simon and Schuster Audio, October 1, 1997, ISBN 978-0-671-57722-3
  • Good Intentions Corrupted: The Oil for Food Scandal And the Threat to the U.N., Paul Volcker, Jeffrey A. Meyer and Mark G. Califano, Public Affairs Gorgias Press, August 28, 2006, ISBN 978-1-58648-472-9

See also


  1. Rebello, Kathy (June 3, 1987). "Inflation fighter: 'A time to leave'". USA TODAY.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  2. "Obama Announces Economic Advisory Board". Retrieved March 12, 2011.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  3. "Obama Names Volcker to Head New Economic Panel" [1], Accessed November 26, 2008.
  4. 4.0 4.1 4.2 Treaster (2004), pp. 87-92.
  5. Treaster (2004), p. 38.
  6. Silber (2012) p. 2.
  7. Robert D. Hershey, Jr. "Volcker Out after 8 Years as Federal Reserve Chief; Reagan Chooses Greenspan" The New York Times (June 3, 1987). Retrieved May 21, 2011
  8. "Paul A. Volcker – Council on Foreign Relations". Retrieved March 12, 2011.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  10. "To Treat the Fed as Volcker Did". The New York Times. December 4, 2008. Retrieved February 1, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  11. "Volcker: The Triumph of Persistence (Bloomsbury Press; 2012) 454 pages, p.8,"
  12. "US Federal Debt vs GDP – US Federal Reserve". Retrieved December 4, 2013. External link in |publisher= (help)<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  13. "US Federal Debt vs GDP – US Federal Reserve". Retrieved March 5, 2013. External link in |publisher= (help)<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  14. Shull, Bernard. 2005. The Fourth Branch: The Federal Reserve's Unlikely Rise To Power And Influence. Praeger/Greenwood. ISBN 1-56720-624-7. p. 142.
  15. Gardels, Nathan. Stiglitz: The Fall of Wall Street Is to Market Fundamentalism What the Fall of the Berlin Wall Was to , The Huffington Post, September 16, 2008. Retrieved September 27, 2009.
  16. Chan, Sewell (December 11, 2010) The Fed? Ron Paul's Not a Fan, New York Times
  18. "Former Federal Reserve chairman Volcker donates public service papers to Princeton". Princeton University. Princeton University. Retrieved October 2, 2015.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  19. "Derivatives Practices and Principles".<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  20. "Derivatives: Practices and Principles: Follow-up Surveys of Industry Practice".<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  21. "Group of 30 Current Members".<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  22. Treaster (2004), p. x.
  23. "Annual Report of the IFRS Trustees Foundation" (PDF).<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  24. Independent Inquiry Committee into the United Nations Oil-for-Food Programme – Second Interim Report (29 March 2005) p.77
  25. Traub, James. 2006. The Best Intentions: Kofi Annan and the UN in the Era of American Power. New York: Picardor, n.d., p. 420.
  26. Calmes, Jackie (January 31, 2008). "Volcker Joins List of Obama Backers". Washington Wire. The Wall Street Journal. Retrieved July 18, 2008.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  27. The Economic Club of New York: April 8, 2008 Transcript 101st Year, 395th Meeting, (8 April 2008) p.2, and pp.5–8.
  28. 101st Year, 395th Meeting, (8 April 2008) pp. 2, 5–8.
  29. "Kudlow, Lawrence, "Where's Bernanke's Inner Volcker?" '''' (June 27, 2008)". Retrieved March 12, 2011.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  30. Transcript of Third Presidential Debate, October 15, 2008.
  31. ""President-elect Barack Obama establishes President's Economic Recovery Advisory Board" ''''". November 26, 2008. Retrieved March 12, 2011.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  32. Werdigier, Julia (December 8, 2009). "Volcker Criticizes Calls to Limit Bank Regulation". The New York Times. Retrieved January 3, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  33. Murray, Alan (December 14, 2009). "Paul Volcker: Think More Boldly". The Wall Street Journal. Retrieved January 31, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  34. Rose, Charlie (December 30, 2009). "Paul Volcker: The Lion Lets Loose". Business Week. Retrieved January 31, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  35. Johnson, Simon (December 17, 2009). "Paul Volcker Finds a Hammer". The New York Times. Retrieved January 3, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  36. McGrane, Victoria (January 4, 2010). "'Big is bad' catches on in Congress". The Politico. Retrieved January 4, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  37. Onaran, Yalman (January 6, 2010). "Volcker Sidelined as Obama Reshapes Economic Advisory Panel". Bloomberg. Retrieved January 6, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  38. David Cho, and Binyamin Appelbaum (January 22, 2010). "Obama's 'Volcker Rule' shifts power away from Geithner". The Washington Post. Retrieved February 13, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  39. Conway, Brendan (January 26, 2010). "'Volcker Plan' Bank Units Worth Tens Of Billions". Dow Jones & Company. Archived from the original on January 30, 2010. Retrieved January 27, 2010. Unknown parameter |deadurl= ignored (help)<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  40. Aguilar, Luis (December 10, 2013). "Statement on the Volcker Rule: Reducing Systemic Risk By Banning Excessive Proprietary Trading with Depositors' Money". Retrieved October 6, 2014.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  41. "Spotlight" in The Week, 2010 February 5 (Volume 10 Issue 449), p. 38.
  42. GEOFF EARLE in Washington and Tony Davenport in NY (April 7, 2010). "Bam man pitching national sales tax". New York Post. Retrieved March 12, 2011.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  43. "Janice Volcker Is Married". The New York Times. September 20, 1981. Retrieved July 18, 2008.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  44. "WEDDINGS; Martha DeJong and James Volcker". The New York Times. August 1, 1993. Retrieved July 18, 2008.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  45. 45.0 45.1 Treaster (2004), pp. 83, 86, 110.
  46. "Paid Notice: Deaths: VOLCKER, BARBARA". The New York Times. June 16, 1998. Retrieved March 26, 2008.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  47. "Speakers Platform Speakers Bureau: Paul Volcker, Keynote Speaker On: Economics, Global Affairs, Finance / Tax". Speakers Platform. Archived from the original on February 23, 2008. Retrieved March 25, 2008.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  48. Faber, Eberhard (September 29, 1986). "Fishing with Volcker". Fortune Magazine. CNN. p. 4. Retrieved December 22, 2009.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  49. Lyons, Nick (May 3, 1987). "Gone off fly-fishing". The New York Times. Retrieved March 25, 2008.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  50. Russell, George (June 15, 1987). "The New Mr. Dollar". Time Magazine. Time Inc. p. 4. Retrieved March 19, 2008.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  51. Freeland, Chrystia (April 11, 2008). Man in the News: Paul Volcker. Financial Times. Retrieved on 2008-11-27 from
  52. Cuff, Daniel F. (September 3, 1987). "BUSINESS PEOPLE; Of Volcker's Laundry and Fiscal Restraint". The New York Times. Retrieved March 25, 2008.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  53. Loomis, Carol (December 24, 2009). "Paul Volcker is Engaged!". CNN. Retrieved May 22, 2010.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  54. Caren Bohan, Kristina Cooke: ”Cheap cigars, politics and the Volcker Rule“, (March 12, 2010)
  55. "Honorary Degrees / UD Alumni Relations". Retrieved March 12, 2011.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>


  • Morris, Charles W. (2009). The Sages: Warren Buffett, George Soros, Paul Volcker, and the Maelstrom of Markets. PublicAffairs. ISBN 978-1-58648-752-2.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  • Silber, William L. (2012). Volcker: The Triumph of Persistence. Bloomsbury Press. p. 464. ISBN 978-1-620-40292-4.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>
  • Treaster, Joseph (2004). Paul Volcker: the making of a financial legend. Hoboken, N.J.: John Wiley Sons. ISBN 978-0-471-42812-1.<templatestyles src="Module:Citation/CS1/styles.css"></templatestyles>

External links

Government offices
Preceded by
Alfred Hayes
President of the Federal Reserve Bank of New York
Succeeded by
Anthony Solomon
Preceded by
William Miller
Chair of the Federal Reserve
Succeeded by
Alan Greenspan
Political offices
New office Chairperson of the President's Economic Recovery Advisory Board
Succeeded by
Jeff Immelt
as Chairperson of the Council on Jobs and Competitiveness