E. Gerald Corrigan

Edward Gerald Corrigan
10th President of the Federal Reserve Bank of Minneapolis
In office 1980–1984
Preceded by	Mark H. Willes
Succeeded by	Gary H. Stern
7th President of the Federal Reserve Bank of New York
In office January 1, 1985 – July 19, 1993
Preceded by	Anthony M. Solomon
Succeeded by	William J. McDonough
Personal details
Born	(1941-06-13) June 13, 1941 Waterbury, Connecticut
Nationality	American
Spouse(s)	Cathy Minehan
Alma mater	Fairfield, B.A. Fordham, M.A, Ph.D
Profession	Economist

Edward Gerald Corrigan (born in Waterbury, Connecticut, on June 13, 1941) is an American banker who was the seventh President of the Federal Reserve Bank of New York and Vice-Chairman of the Federal Open Market Committee.^[1] Corrigan is currently a partner and managing director in the Office of the Chairman at Goldman Sachs and was appointed chairman of GS Bank USA, the bank holding company of Goldman Sachs, in September 2008.^[2] He is also a member of the Group of Thirty, an influential international body of leading financiers and academics.

Education

Corrigan earned a bachelor's degree in economics from Fairfield University in 1963. He received a master's degree in 1965 and a Ph.D. in 1971, both in economics, from Fordham University.^[2]

Career

Federal Reserve

Corrigan began his career at the New York Federal Reserve in 1968 where he remained for twenty-five years, becoming Vice President in 1976, and serving as a Special Assistant to Federal Reserve Board Chairman, Paul Volcker in Washington, D.C. He went on to serve as president of the Federal Reserve Bank of Minneapolis from 1980 to 1984 and President of the Federal Reserve Bank of New York from 1985 until 1993.

From 1991 to 1993 he was Chairman of the Basel Committee on Banking Supervision. From 1993 to 1995 he was director of the Council on Foreign Relations.^[3]

Post-Federal Reserve; Goldman Sachs

Corrigan joined Goldman Sachs in 1994 and has been a partner and managing director in the Office of the Chairman since 1996. He serves as co-chair of both the Risk Committee and the Global Compliance and Controls Committee at Goldman Sachs. In 1994 Corrigan also joined the influential Washington-based financial advisory body, the Group of Thirty.

Since 1999, Corrigan has served as Chairman of the Counterparty Risk Management Policy Group (CRMPG).^[4] The CRMPG is a financial industry policy group designed to promote enhanced strong practices in counterparty credit risk and market risk management. In this capacity Corrigan testified before the Committee on Financial Services of the U.S. House of Representatives concerning hedge funds and systematic risk in the financial markets on March 13, 2007. In concluding his testimony, Corrigan foreshadowed the pending financial crisis of 2007–2008 by stating "[o]ne of the most difficult challenges in human endeavor is how we manage low probability events – such as financial shocks – that can cause so much damage. In the financial arena I believe we are making progress in meeting that challenge and we must continue the effort for we know that the future will bring new tests of the stability and resiliency of the financial system."^[5]

In 2005, the Global Association of Risk Professionals awarded their "Risk Manager of the Year" designation to Corrigan.^[6]

In a major article in April, 2009 about Obama Administration Treasury Secretary Timothy Geithner and his role in the national and global financial crisis, The New York Times' writers traced the evolution of the AIG part in the crisis in September, 2008. A.I.G.'s chief executive at the time, Robert B. Willumstad, was seeking help raising capital from JP MorganChase, not using Goldman Sachs because it was "one of A.I.G.’s biggest trading partners" and, Mr. Willumstad believed, "the potential conflicts of interest ... were too great." However, on "Monday, Sept. 15, Mr. Geithner pushed A.I.G. to bring Goldman onto its team to raise capital," the article said, quoting Mr. Willumstad. "Mr. Geithner and Mr. Corrigan ... were close, speaking frequently and sometimes lunching together at Goldman headquarters. On [Sep. 15th], the company’s chief executive, Lloyd C. Blankfein, was at the New York Fed. A Goldman spokesman [told the Times] 'We don’t believe anyone at Goldman Sachs asked Mr. Geithner to include the firm in the assignment.' Mr. Geithner said he had suggested Goldman get involved because the situation was chaotic and 'time was running out,'" the article concluded relative to Mr. Corrigan's and Goldman's involvements with the then-NY Fed president Geithner.

The article went on, though, relative to the episode as a whole, "A.I.G.’s search for [private] capital was fruitless" and the Federal Reserve led by Chairman Ben Bernanke and the Treasury led by Secretary Hank Paulson (formerly of Goldman) had to come to the rescue. "By late Tuesday afternoon [Sep. 16], the government would step in with an $85 billion loan, the first installment of a bailout that now stands at $182 billion. As part of the bailout, A.I.G.’s trading partners, including Goldman, were compensated fully for money owed to them by A.I.G. Analysts say the New York Fed should have pressed A.I.G.’s trading partners to take a deep discount on what they were owed. But Mr. Geithner said he had no bargaining power because he was unwilling to threaten A.I.G.’s trading partners with a bankruptcy by the insurer for fear of further destabilizing the system. A recent report on the A.I.G. bailout by the Government Accountability Office found that taxpayers may never get their money back."^[7]

In February, 2010, Corrigan faced inquiry in the House of Commons Treasury committee in London, England for Goldman's involvement with currency swaps executed with the Greek government. The swaps, Corrigan acknowledged, "did produce a small reduction in the debt to GDP ratio at the time." The ratio in turn was a factor in the economic management of Greek finances within the European Union and the Euro currency, and in the context of the 2010 European sovereign debt crisis. Corrigan's testimony continued, "With the benefit of hindsight, it seems very clear that standards of transparency could have been and should have been higher." The report on his testimony concluded, "Corrigan’s key defence against the Greek allegations was that every bank was cooking up deals with European governments — not just Greece. It’s no lie."^[8]

In the May 7, 2010, Goldman public stockholder's meeting, the company "announced the creation of an internal committee that will examine possible conflicts of interest and other issues such as transparency and disclosure. It’s headed by Vice Chairman [Michael] Evans and ... Corrigan, chairman of Goldman Sachs Bank USA. No board members are involved." The report on this development was part of a larger analysis of the role of the board of directors in the oversight of the management, business and ethics of the company, in light of the intense scrutiny of the company's role in the national and global financial crises of recent years.^[9]

Philanthropic giving

Fairfield University honored Corrigan in 1981 with an Alumni Professional Achievement Award. And in 2008, Corrigan donated $5 million to Fairfield to establish the E. Gerald Corrigan '63 Chair in the Humanities and Social Sciences and the The Mary Hardy Corrigan Reading Room, named for Corrigan's mother and located on the second level of the DiMenna-Nyselius Library.^[10]

In 2007, Corrigan donated $5 million to Fordham University to establish the Corrigan Chair in International Business and Finance at the Graduate School of Business Administration.^[11]

Personal

Corrigan is married to Cathy Minehan, President of the Federal Reserve Bank of Boston from 1994 to 2007.^[12]

References

External links

• Group of Thirty Profile
• Federal Reserve Bank of New York Profile
• E. Gerald Corrigan gives $5 million to Fairfield University
• Gone Fishing: E. Gerald Corrigan and the Era of Managed Markets, The Herbert Gold Society (1993)
• Statements and speeches of E. Gerald Corrigan

See also

• Global financial crisis of 2008–2009
• Financial crisis of 2007–2010