Paul Volcker, the former Federal Reserve chairman who broke the back of U.S. inflation in the 1980s and three decades later led President Barack Obama’s bid to rein in the investment risk-taking of commercial banks, has died. He was 92.

He died Sunday in New York, according to the New York Times, which cited his daughter, Janice Zima.

In a career that spanned more than half a century, Volcker became a one-man economic cleanup crew, called on to devise a successor to the gold standard, a cure for runaway inflation and, in 2008, a response to the housing-market collapse that exposed Americans as perilously leveraged and their banks as highly prone to risk. That last effort led to the Volcker Rule, widely loathed by bankers and subsequently a top priority for overhaul by the Trump administration.

The grandson of German immigrants, Volcker held strong beliefs about the dangers of inflation and the virtues of frugality. He flew coach, grumbled about restaurant prices and took his first wife on a honeymoon to a fishing cabin in Maine rather than to Bermuda, as she’d hoped. He scorned financial industry innovations such as credit-default swaps and quipped that the best new financial product in recent decades was the automated teller machine.

Obama’s Call
Volcker worked at the Treasury Department, the Fed, or as an economic adviser under six presidents. At 81, two decades removed from his Fed days, he was recalled to government duty in November 2008 by Obama, the president-elect, who named him to head a new Economic Recovery Advisory Board as the nation was struggling to pull out of a recession and recover from the worst financial crisis since the Great Depression.

Within months, the 6-foot-7-inch (2 meters) Volcker was standing out as the White House insider pushing for the most radical regulatory reforms. He wanted to bar traditional deposit-taking banks from making speculative investments on their own account, the practice known as proprietary trading, and from investing in hedge funds and private-equity funds. Obama formally proposed the idea in January 2010, calling it “a simple and common-sense reform, which we’re calling the Volcker Rule -- after this tall guy behind me.”

Volcker’s rule was incorporated in the 2010 Dodd-Frank law -- though not before being weakened, which led Volcker to express doubt about the Obama economic team’s commitment to it. “They say they’re for it, but their hearts are not in it,” he told Ron Suskind, author of the 2011 book “The Confidence Men.”

When Volcker left his White House post, in February 2011, regulators were sifting through a flood of public comments on the implementation of Dodd-Frank. Banks continued to argue that Volcker’s proposal would excessively restrict their business.

Wall Street Critics
“Paul Volcker, by his own admission, has said he doesn’t understand capital markets,” Jamie Dimon, chief executive officer at JPMorgan Chase & Co., said on Fox Business News in February 2012. “Honestly, he has proven that to me.”

The Federal Reserve, Federal Deposit Insurance Corp. and three other agencies completed the final rule in December 2013. It ran close to 100 pages, with hundreds more in supporting material, and sought to distinguish proprietary trading from still-permitted market making and hedging to mitigate risks. Volcker quipped that in the end, “I was gratified to see that the rule itself is shorter than my own home insurance policy.”

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