Paul Volcker, the former head of the Federal Reserve, who fought a war against inflation and was the driving force behind a rule to stop risky bank lending after the real estate collapse in 2009, has died at age 92.
Volcker was the Federal Reserve chairman in the 1980s at a time when inflation skyrocketed, forcing him to take drastic measures by raising interest rates to 22 percent. It infuriated housing developers.
Most recently, Volcker became known for the “Volcker Rule.” Passed as part of the Dodd-Frank Wall Street Reform Act of 2010, the “Volcker Rule” was designed to keep banks from betting on speculative investments such as mortgage backed securities that contributed to the financial crisis. Banks complain that this has directly impacted their ability to grow and make more real estate loans.
At six-foot seven-inches tall, Volcker was a larger than life type figure in Washington, D.C. with an affinity for cheap cigars and fly fishing. He was appointed to be the Fed Chairman in 1979 under President Jimmy Carter after serving as the president of the New York Federal Reserve. He served two contentious terms during President Reagan’s administration until 1987.
His fight against inflation resulted in immense pushback from the real estate industry since rising interest rates can cause mortgages and home buying to become more expensive. The move caused Americans to stop buying homes and homebuilders mailed pieces of two-by-fours to the Federal Reserve’s headquarters, according to The New York Times. Volcker ultimately was able to win his fight against inflation, keeping the inflation rate below 3 percent.
After serving at the Fed, he worked on various boards and committees, including working to return money to the families of Holocaust victims from Swiss banks. He wrote a memoir last year at age 91. He is survived by his wife Anke Dening and two children from his first wife.