Paul Volcker, the legendary central banker who guided the U.S. Federal Reserve through the hyperinflation and monetary instability of the early 1980s, has died at the age of 92.
Volcker, who was named Fed Chairman by President Jimmy Carter in 1979 and re-appointed by President Ronald Reagan four years later, was a towering figure in global banking - and not only for his commanding height of six feet seven inches. The New York Times first reported his death, citing a quote from his daughter.
A cum laude graduate of Princeton University before earning an MBA in Political Studies from Harvard University in 1951, Volcker is credited with steering the U.S. economy away from the crippling inflation and domestic recession of the late 1970s with a massive prime rate hike -- which peaked at 21.5% in 1981 -- and a series of moves he dubbed the "Saturday Night Special" that faced savage attacks from politicians, business interests and the media.
The subsequent gains in the U.S. dollar, however, forever changed the nature of the economy's trade balance, as cheap foreign-made goods ultimately crowded out domestic manufacturers and led to a decades-long series of current account deficits that indirectly led to the resurgence of export-focused economies such as China and Japan.
Volcker attempted to address this imbalance through the Plaza Accord in 1985, which called for massive currency revaluations by Germany and Japan, but its effects were limited and the dollar continued to dominate global foreign exchange markets until the introduction of the euro in 1999.
The Cape May, New Jersey native was later recognized by President Barack Obama in 2010 through the eponymous 'Volcker Rule', a series of regulations designed to tame commercial banks from investing in hedge funds and private equity firms, as well as limiting the kinds of investing they can do with their own accounts.
His name -- as well as his expertise -- was also used to buttress the authority of such global scandals as the Iraqi Oil-for-Food program, the misuse of deposits held by Jewish investors in Swiss banks during and after the Second World War and widespread corruption linked to the World Bank.
Volcker's larger contribution to American life, however, was to have placed the Federal Reserve -- and by extension central banks around the world -- at the heart of domestic economic policy.