Commentary Type

A Tribute to Jacques de Larosière on his 90th Birthday Celebration

Speech delivered at the Organization for Economic Cooperation and Development, Paris 


It is a pleasure to join in celebrating Jacques de Larosière's 90th birthday.  Our paths first crossed during the Committee of Twenty (C-20) meetings and immediately afterward.  I was a junior bag carrier at the Federal Reserve. 

In 1975, Jacques was central to resolving two major, remaining differences between France and the United States on gold and the exchange rate system.

I fetched Arthur Burns from the Federal Reserve to the Pan American Health Organization to "iron out" with Jacques a "misunderstanding" about the compromise on gold that had been reached the evening before.  I was not in the room but can attest that it was a noisy exchange.

Later that year, Jacques and Ed Yeo produced revised Article IV language that was unveiled at Rambouillet. We Fed staffers felt that the linguistic construction defining members' exchange rate obligation was somewhat convoluted "to collaborate with the Fund and other members to assure orderly exchange arrangements and to promote a stable system of exchange rates."

These achievements allowed all of us to move on.

Seven years later, Paul Volcker was Federal Reserve chairman. His collaboration with Jacques saved the global economy and financial system.  Young Angel Gurria was also involved. First, he borrowed Mexico's money and then he restructured the borrowing.

This week I wrote a blog post celebrating the de Larosière-Volcker cooperation.

Olivier Blanchard commented on my first draft, "Was it really that smooth between the US and the Fund?"  This was not his experience a decade ago.

I can relate to his reaction.

The "Three US Amigos," Bernanke, Geithner, and Paulson, are justly proud of their efforts and those of their colleagues in taming the global financial crisis. However, to my personal dismay as a participant then and as the coauthor of the sole international chapter in their new book, the Amigos decline fully to recognize that international cooperation was also essential to resolving that recent crisis.

Around the world today, cooperation and compromise sputter.  We lack the kind of leadership that Jacques and Paul epitomized, starting with the United States.  Recall that during the global debt crisis, three plans carried the names of US officials: Volcker, Baker, and Brady.  Where are such leaders today?

I salute Jacques de Larosière, a giant in a different and better time who is still going strong.

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