Alan Greenspan, the former U.S. Federal Reserve (Fed) chair who wielded major influence over the U.S. and global economies for nearly 20 years starting in the late 1980s, has died, the Fed said on the 22nd local time. He was 100.
According to AP and other foreign media, the former chair, who had been battling complications from Parkinson's disease, died at his home in Washington, D.C., on the day.
In a news release on the day, the Fed said it received "with deep sadness the news of former Chair Alan Greenspan's passing," noting that "his contributions to currency policy and economic theory left an indelible mark not only on the Fed but also on the broader economy and American society."
The Fed said the former chair "led the Fed not only through a period of considerable economic expansion but also during times of severe crisis." It also said that during his tenure the Fed supported U.S. economic growth and ushered in an era of price stability.
The former chair led the Fed for 19 years from 1987 to 2006. Following former Chair William McChesney Martin, who served from 1951 to 1970, he is the second-longest-serving Fed chair in history.
He led the Fed across four U.S. administrations: Ronald Reagan, George H.W. Bush, Bill Clinton, and George W. Bush. He is regarded as a figure who left both achievements and limitations during his tenure.
AP cited as a major achievement the decade of U.S. economic boom and surging stock prices that continued from March 1991. Inflation, which plagued the U.S. and global economies in the 1970s, stabilized during his tenure, and the U.S. unemployment rate at one point fell below 4% for the first time since the 1970s.
Two months after taking office in 1987, he faced a crisis when the U.S. stock market posted the worst one-day drop on record. The Dow Jones Industrial Average plunged 22.6% in a single day. Many assess that his response—reassuring investors by pledging ample liquidity—played a large role in the market's swift return to stability.
Credited with steering America's long-term growth and prosperity, he was nicknamed the "maestro." His remarks moved global financial markets, and the sight of him entering the Fed meeting room carrying a briefcase stuffed with papers was interpreted as a signal of policy change, giving rise to the term "Briefcase Indicator."
He was also known for his intense focus on work. According to AP, he meticulously analyzed various economic data—such as monthly truck loadings and steel output—to track the economic flow, and would directly call economic experts at other government agencies to discuss details.
However, two years after he left the Fed, the 2008 global financial crisis erupted, and questions about responsibility followed. Critics said the accommodative currency policy during Chair Greenspan's tenure, excessive faith in financial markets, and insufficient oversight were major causes of the crisis.
Many also assess that the low interest rate policy he led inflated a housing price bubble, and that amid deregulatory trends, banks and financial companies rolled out risky derivatives in succession, amplifying default risks. AP reported that the former chair later acknowledged, "It was a mistake to assume that U.S. banks—which form the foundation of the financial system and the overall economy—were inherently capable of self-regulation."
He was well aware of the impact his words had on markets and was also famous for his generally opaque speaking style during his tenure. Appearing before a congressional committee, he reportedly said, "You may have thought you understood what I said, but I'm not sure whether you realize that what you heard is not what I meant."
During the 1997 International Monetary Fund (IMF) foreign exchange crisis, AP noted that the Fed led by the former chair persuaded U.S. banks to extend the maturities of short-term loans to Korea, which was in crisis.
Born in Manhattan, New York, the former chair was called a math prodigy from childhood. He also had deep knowledge of music, having once attended the Juilliard School. He completed his undergraduate through doctoral studies in economics at New York University, ran an economic consulting firm for nearly 30 years, and was tapped by President Reagan to lead the Fed. His survivors include his wife, Andrea Mitchell, a well-known journalist.