Godspeed, Paul Volcker

As our ongoing “200 Financial Revolutionists” series honors leading financial innovators during the coming months, we also lost a leading light of finance and economics this week. Former Fed chairman Paul Volcker passed away at age 92.

Volcker served as chairman of the Federal Reserve under Presidents Jimmy Carter and Ronald Reagan and also chaired the Economic Recovery Advisory Board, which was formed in the aftermath of the Great Recession.

Like most who served in the public sphere, Volcker leaves behind a complicated legacy. His drastic increase in interest rates in the early 1980s is credited with helping to tame rising inflation and ultimately leading to long-term economic growth. But in the short term, the move greatly damaged sectors such as farming and manufacturing, culminating with angry farmers driving tractors down the streets of Washington in protest.

Today, Volcker may be best known for proposing the eponymous “Volcker Rule.” It became part of the Dodd-Frank Act, which limits banks from making certain kinds of speculative investments. Indeed, the rule has changed banking drastically over the past decade-plus.

Rest in peace, Paul Volcker.