E. Gerald Corrigan, who helped mitigate 1987 stock market crash, dies at 80

E. Gerald Corrigan, who as the aggressive chairman of the Federal Reserve Bank of New York helped cushion the Wall Street crash of the late 1980s, died May 17 at a nursing home in the memory in Dedham, Mass. He was 80 years old.

The cause was complications from Alzheimer’s disease, her daughter Elizabeth Corrigan said.

As chairman of the Federal Reserve Bank in Minneapolis from 1980 to 1984, and then of the New York Fed from 1985 to 1993, Mr. Corrigan used his regulatory prerogatives to help solve national and global financial crises and to remedy to some of the causes. occasional market instability.

“He played a crucial role in providing psychological comfort during a critical few days after the stock market crash,” Paul A. Volcker, the former Federal Reserve Board chairman, said when Mr. Corrigan retired from the Fed in 1993, referring to his actions. after the Dow Jones industrial average fell more than 22% in a single day in October 1987.

In this upheaval, Corrigan urged Fed Chairman Alan Greenspan to reassure markets that the Federal Reserve would pump all the money needed into the financial system to reduce volatility. He also played a vital role in other crises: he helped the Fed deal with the collapse of investment bank Drexel Burnham Lambert in 1989 and Salomon Brothers in 1991, and in dealing with the rising inflation, emerging market debt and the need to regulate global credit. risk.

After Mr. Corrigan retired from the Fed, he joined Goldman Sachs, where he became chief executive in 1996 and later chairman of the firm’s international advisers, co-chairman of its trading standards committee and first non-chairman. executive of his commercial bank, now known as Goldman Sachs Bank. He retired from Goldman in 2016.

Edward Gerald Corrigan, known as Jerry, was born on June 13, 1941 in Waterbury, Connecticut. Her father, Edward, was a restaurant manager. His mother, Mary (Hardy) Corrigan, was a librarian.

He received a bachelor of social science degree in economics from Fairfield University in Connecticut in 1963. At Fordham University in New York, he received a master’s degree in economics in 1965 and a doctorate in the same subject in 1971. ( Years later, he donated $5 million to each university to create chairs.)

After teaching for a year at Fordham, he joined the Federal Reserve Bank of New York as a researcher in 1968 while working on his doctorate. When Mr. Volcker, chairman of the New York Fed, became chairman of the Federal Reserve Board in 1979, he recruited Mr. Corrigan as a special assistant.

During his tenure at the Fed, Mr. Corrigan was appointed Chairman of the Basel Committee on Banking Supervision by the world’s central bank governors, a position he held from 1991 to 1993. He also served as Deputy chairman of the Federal Open Market Committee. from 1984 to 1993. In 1992, he was appointed co-chairman of the Forum of Russian-American Bankers, which helped the former Soviet Union develop a market-oriented banking and financial system.

In addition to his daughter Elizabeth, Mr. Corrigan is survived by another daughter, Karen Corrigan Tate, from his marriage to Linda Barlow, which ended in divorce; his wife, Cathy Minehan, who served as president of the Federal Reserve Bank of Boston from 1994 to 2007; his stepchildren, Melissa Minehan Walters and Brian Minehan; one sister, Patricia Carlascio; and five grandchildren.

Mr Corrigan’s romance with Ms Minehan raised questions about a possible conflict of interest when she was at the Fed and he was at Goldman Sachs in the mid-1990s, but he said at the time that ‘they had consulted lawyers to avoid leaks of sensitive data. information that could benefit their business.

During his leadership, the Fed was criticized for failing to rein in abuses at the scandal-wracked Bank of Credit and Commerce International. But Mr Corrigan said when he retired that “without the Fed there is a good chance BCCI will still be in business”.

In his 1993 remarks, Mr. Volcker said that Mr. Corrigan had “a good conceptual understanding of the financial world, but more importantly, he knows how to get things done.”

“It’s a rare quality in the bureaucratic world he grew up in,” Volcker added.

When the market crashed in 1987, for example, Fed officials planned to provide a turgid technical response.

“I said it was the last thing we needed,” Mr Corrigan said in Sebastian Mallaby’s ‘The Man Who Knew: The Life and Times of Alan Greenspan’ (2016). “What we need is a statement of about 10 words.”

Mr. Greenspan took Mr. Corrigan’s advice, saying (in 30 words) that the Fed would make all the cash available while Mr. Corrigan pestered the big banks to keep lending to support the markets.

When Mr Corrigan retired from the Fed, he said he would take a job in the private sector where “I will try to limit myself to working six days a week, instead of seven”. The aftermath of the 1987 stock market crash, he said, was his most memorable moment.

“In terms of pulse,” he said, “that’s the one that wins the prize.”

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