E. Gerald Corrigan
Encyclopedia
Edward Gerald Corrigan is an American banker who was the 7th President of the Federal Reserve Bank of New York
and Vice-Chairman of the Federal Open Market Committee
. 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. He is also a member of the Group of Thirty
, an influential international body of leading financiers and academics.
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
.
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
.
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). 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."
In 2005, the Global Association of Risk Professionals awarded their "Risk Manager of the Year" designation to Corrigan.
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."
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."
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.
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
.
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.
, President of the Federal Reserve Bank of Boston
from 1994 to 2007.
Federal Reserve Bank of New York
The Federal Reserve Bank of New York is one of the 12 Federal Reserve Banks of the United States. It is located at 33 Liberty Street, New York, NY. It is responsible for the Second District of the Federal Reserve System, which encompasses New York state, the 12 northern counties of New Jersey,...
and Vice-Chairman of the Federal Open Market Committee
Federal Open Market Committee
The Federal Open Market Committee , a committee within the Federal Reserve System, is charged under United States law with overseeing the nation's open market operations . It is the Federal Reserve committee that makes key decisions about interest rates and the growth of the United States money...
. Corrigan is currently a partner and managing director in the Office of the Chairman at Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
and was appointed chairman of GS Bank USA, the bank holding company of Goldman Sachs, in September 2008. He is also a member of the Group of Thirty
Group of Thirty
The Group of Thirty, often abbreviated to G30, is an international body of leading financiers and academics which aims to deepen understanding of economic and financial issues and to examine consequences of decisions made in the public and private sectors related to these issues...
, an influential international body of leading financiers and academics.
Education
Corrigan earned a bachelor's degreeBachelor's degree
A bachelor's degree is usually an academic degree awarded for an undergraduate course or major that generally lasts for three or four years, but can range anywhere from two to six years depending on the region of the world...
in economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
from Fairfield University
Fairfield University
Fairfield University is a private, co-educational undergraduate and master's level teaching-oriented university located in Fairfield, Connecticut, in the New England region of the United States. It was founded by the Society of Jesus in 1942, and today is one of 28 member institutions of the...
in 1963. He received a master's degree
Master's degree
A master's is an academic degree granted to individuals who have undergone study demonstrating a mastery or high-order overview of a specific field of study or area of professional practice...
in 1965 and a Ph.D.
Ph.D.
A Ph.D. is a Doctor of Philosophy, an academic degree.Ph.D. may also refer to:* Ph.D. , a 1980s British group*Piled Higher and Deeper, a web comic strip*PhD: Phantasy Degree, a Korean comic series* PhD Docbook renderer, an XML renderer...
in 1971, both in economics, from Fordham University
Fordham University
Fordham University is a private, nonprofit, coeducational research university in the United States, with three campuses in and around New York City. It was founded by the Roman Catholic Diocese of New York in 1841 as St...
.
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 VolckerPaul Volcker
Paul Adolph Volcker, Jr. is an American economist. He was the Chairman of the Federal Reserve under United States Presidents Jimmy Carter and Ronald Reagan from August 1979 to August 1987. He is widely credited with ending the high levels of inflation seen in the United States in the 1970s and...
in Washington, D.C.
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
He went on to serve as president of the Federal Reserve Bank of Minneapolis
Federal Reserve Bank of Minneapolis
The Federal Reserve Bank of Minneapolis, located in Minneapolis, Minnesota, in the United States, covers the 9th District of the Federal Reserve, including Minnesota, Montana, North and South Dakota, northwestern Wisconsin, and the Upper Peninsula of Michigan...
from 1980 to 1984 and President of the Federal Reserve Bank of New York
Federal Reserve Bank of New York
The Federal Reserve Bank of New York is one of the 12 Federal Reserve Banks of the United States. It is located at 33 Liberty Street, New York, NY. It is responsible for the Second District of the Federal Reserve System, which encompasses New York state, the 12 northern counties of New Jersey,...
from 1985 until 1993.
From 1991 to 1993 he was Chairman of the Basel Committee on Banking Supervision
Basel Committee on Banking Supervision
The Basel Committee on Banking Supervision is a committee of banking supervisory authorities that was established by the central bank governors of the Group of Ten countries in 1975. It provides a forum for regular cooperation on banking supervisory matters. Its objective is to enhance...
. From 1993 to 1995 he was director of the Council on Foreign Relations
Council on Foreign Relations
The Council on Foreign Relations is an American nonprofit nonpartisan membership organization, publisher, and think tank specializing in U.S. foreign policy and international affairs...
.
Post-Federal Reserve; Goldman Sachs
Corrigan joined Goldman SachsGoldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
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
Group of Thirty
The Group of Thirty, often abbreviated to G30, is an international body of leading financiers and academics which aims to deepen understanding of economic and financial issues and to examine consequences of decisions made in the public and private sectors related to these issues...
.
Since 1999, Corrigan has served as Chairman of the Counterparty Risk Management Policy Group (CRMPG). The CRMPG is a financial industry policy group designed to promote enhanced strong practices in counterparty
Counterparty
A counterparty is a legal and financial term. It means a party to a contract. A counterparty is usually the entity with whom one negotiates on a given agreement, and the term can refer to either party or both, depending on context....
credit risk
Credit risk
Credit risk is an investor's risk of loss arising from a borrower who does not make payments as promised. Such an event is called a default. Other terms for credit risk are default risk and counterparty risk....
and market
Market risk
Market risk is the risk that the value of a portfolio, either an investment portfolio or a trading portfolio, will decrease due to the change in value of the market risk factors. The four standard market risk factors are stock prices, interest rates, foreign exchange rates, and commodity prices...
risk management
Risk management
Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities...
. In this capacity Corrigan testified before the Committee on Financial Services of the U.S. House of Representatives concerning hedge funds and systematic risk
Systematic risk
In finance, systematic risk, sometimes called market risk, aggregate risk, or undiversifiable risk, is the risk associated with aggregate market returns....
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
Shock (economics)
In economics a shock is an unexpected or unpredictable event that affects an economy, either positively or negatively. Technically, it refers to an unpredictable change in exogenous factors—that is, factors unexplained by economics—which may have an impact on endogenous economic variables.The...
– 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."
In 2005, the Global Association of Risk Professionals awarded their "Risk Manager of the Year" designation to Corrigan.
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
AIG
AIG is American International Group, a major American insurance corporation.AIG may also refer to:* And-inverter graph, a concept in computer theory* Answers in Genesis, a creationist organization in the U.S.* Arta Industrial Group in Iran...
part in the crisis in September, 2008. A.I.G.'s chief executive at the time, Robert B. Willumstad
Robert B. Willumstad
Robert B. Willumstad is a former Chairman and CEO of the American International Group .He was born in Brooklyn and grew up on Long Island. His alma mater is Adelphi University....
, 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
Ben Bernanke
Ben Shalom Bernanke is an American economist, and the current Chairman of the Federal Reserve, the central bank of the United States. During his tenure as Chairman, Bernanke has overseen the response of the Federal Reserve to late-2000s financial crisis....
and the Treasury led by Secretary Hank Paulson
Henry Paulson
Henry Merritt "Hank" Paulson, Jr. is an American banker who served as the 74th United States Secretary of the Treasury. He previously served as the Chairman and Chief Executive Officer of Goldman Sachs.-Early life and family:...
(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."
In February, 2010, Corrigan faced inquiry in the House of Commons Treasury committee in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
for Goldman's involvement with currency swaps executed with the Greek
Greece
Greece , officially the Hellenic Republic , and historically Hellas or the Republic of Greece in English, is a country in southeastern Europe....
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
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
and the Euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
currency, and in the context of the 2010 European sovereign debt crisis
2010 European sovereign debt crisis
From late 2009, fears of a sovereign debt crisis developed among investors concerning some European states, intensifying in early 2010 and thereafter.....
. 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."
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.
Philanthropic giving
Fairfield UniversityFairfield University
Fairfield University is a private, co-educational undergraduate and master's level teaching-oriented university located in Fairfield, Connecticut, in the New England region of the United States. It was founded by the Society of Jesus in 1942, and today is one of 28 member institutions of the...
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
DiMenna-Nyselius Library
DiMenna–Nyselius Library is located on the campus of Fairfield University in Fairfield, Connecticut, USA.- History :In 1948, the library at Fairfield University under the leadership of Librarian Robert Gaffney, boasted over 5,000 books and a panoramic view of the Long Island Sound from the windows...
.
In 2007, Corrigan donated $5 million to Fordham University
Fordham University
Fordham University is a private, nonprofit, coeducational research university in the United States, with three campuses in and around New York City. It was founded by the Roman Catholic Diocese of New York in 1841 as St...
to establish the Corrigan Chair in International Business and Finance at the Graduate School of Business Administration.
Personal
Corrigan is married to Cathy MinehanCathy Minehan
Cathy E. Minehan was President and Chief Executive Officer of the Federal Reserve Bank of Boston one of 12 regional Reserve Banks that together with the Board of Governors in Washington D.C. form the Federal Reserve System.She held this position from 1994 until her retirement in July 2007. Ms...
, President of the Federal Reserve Bank of Boston
Federal Reserve Bank of Boston
The Federal Reserve Bank of Boston, commonly known as the Boston Fed, is responsible for the First District of the Federal Reserve, which covers most of Connecticut , Massachusetts, Maine, New Hampshire, Rhode Island and Vermont. It is headquartered in the Federal Reserve Bank Building in Boston,...
from 1994 to 2007.
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)
See also
- Global financial crisis of 2008–2009
- Financial crisis of 2007–2010