E. Gerald Corrigan, who helped cushion Wall Street’s collapse as the aggressive president of New York’s Federal Reserve Bank in the late 1980s, died May 17 at a memorial center in Dedham, Massachusetts. He was 80 years old.
His daughter Elizabeth Corrigan said it was caused by complications from Alzheimer’s disease.
As President of the Federal Reserve Bank of Minneapolis from 1980 to 1984, and then of the New York Fed from 1985 to 1993, Mr. Corrigan used his prerogatives as regulator to help resolve national and global financial crises and address some of the causes of episodic market instability.
“He played a crucial role in providing psychological reassurance for a few critical days after the stock market crash,” Paul A. Volcker, the former Federal Reserve Board chairman, said when Mr. Corrigan left the Fed in 1993, citing his This was after the industrial average of the Dow Jones fell more than 22 percent in a single day in October 1987.
In this upheaval, Mr. Corrigan called on Fed Chairman Alan Greenspan to reassure markets that the Federal Reserve would pump as much money into the financial system as needed to reduce volatility. He also played an important role in other crises, helping the Fed deal with the collapse of investment bank Drexel Burnham Lambert in 1989 and Salomon Brothers in 1991, as well as with rising inflation, emerging market debt and the need to to regulate global credit risk.
After retiring from the Fed, Mr. Corrigan moved to Goldman Sachs, where in 1996 he became a managing director and later chairman of the firm’s international advisors, co-chair of the Business Standards Committee and the first non-executive chairman of the commercial bank known today as Goldman Sachs Bank. In 2016 he retired from Goldman.
Edward Gerald Corrigan, known as Jerry, was born on June 13, 1941 in Waterbury, Connecticut. His father Edward was a restaurant manager. His mother, Mary (Hardy) Corrigan, was a librarian.
He earned a Bachelor of Social Science degree in economics from Fairfield University in Connecticut in 1963. He received a master’s degree in economics from Fordham University in New York in 1965 and a doctorate in the same subject in 1971. (Years later he donated $5 million to each university to establish professorships.)
After teaching at Fordham for a year, he joined the Federal Reserve Bank of New York as a researcher in 1968 while still working on his PhD. When Mr. Volcker, the president of the New York Fed, became chairman of the Federal Reserve Board in 1979, he recruited Mr. Corrigan as a special assistant.
During his tenure at the Fed, Mr. Corrigan was appointed by the world’s central bank governors to chair the Basel Committee on Banking Supervision, a position he held from 1991 to 1993. He was also vice chairman of the Federal Open Market Committee from 1984 to 1993. In 1992 he was appointed co-chairman of the Russian-American Bankers Forum, which helped the former Soviet Union develop a market-oriented banking and financial system.
In addition to his daughter Elizabeth, Mr. Corrigan is survived by another daughter, Karen Corrigan Tate, from his marriage to Linda Barlow, which ended in divorce; his wife, Cathy Minehan, who was President of the Federal Reserve Bank of Boston from 1994 to 2007; his stepchildren Melissa Minehan Walters and Brian Minehan; a sister, Patricia Carlascio; and five grandchildren.
Mr. Corrigan’s affair with Ms. Minehan raised questions of a possible conflict of interest when she was at the Fed and he was at Goldman Sachs in the mid-1990s, but he said at the time they consulted attorneys to prevent sensitive data from leaking Information that could benefit his business.
During his tenure, the Fed was criticized for failing to curb abuses at the scandal-ridden Bank of Credit and Commerce International. But Mr. Corrigan said when he retired that “if it weren’t for the Fed, chances are pretty good BCCI would still be in business.”
In his 1993 remarks, Mr. Volcker said Mr. Corrigan had “a good conceptual understanding of finance, but more importantly he knows how to get things done”.
“It’s a rare quality in the bureaucratic world he grew up in,” added Mr. Volcker.
For example, when the market crashed in 1987, Fed officials planned to issue a plump technical response.
“I said that’s the last thing we need,” Mr. Corrigan was quoted as saying in Sebastian Mallaby’s The Man Who Knew: The Life and Times of Alan Greenspan (2016). “What we need is a statement that’s about 10 words.”
Taking Mr. Corrigan’s advice, Mr. Greenspan said (in 30 words) that the Fed would provide the money needed, while Mr. Corrigan urged the big banks to keep lending to support markets.
When Mr. Corrigan left the Fed, he said he would take a job in private industry where “I will try to limit myself to working six days a week instead of seven.” The aftermath of the 1987 market crash, said he was his most memorable moment.
“In terms of my heart rate,” he said, “that you win the prize.”