Financial History Issue 128 (Winter 2019) | Page 17
MUSEUM NEWS
DR. JANET L. YELLEN
Distinguished Fellow in Residence,
The Brookings Institution;
Former Chair, Federal Reserve Board
My congratulations to Larry Fink for his
enormous contributions to finance. And
thanks to David Cowen and the Museum
of American Finance for your efforts to
improve Americans’ understanding of
financial markets and their history.
It’s a tremendous honor to receive
the Whitehead Award for Distinguished
Public Service and Financial Leadership.
John Whitehead was an eminent finan-
cier, public servant and philanthropist.
He served with distinction along with
John Weinberg as co-chairman of Gold-
man Sachs and afterwards in a multi-
tude of public positions, including Deputy
Secretary of State under George Schultz,
chairman of the Federal Reserve Bank
of New York and, later, chairman of the
Lower Manhattan Development Corpora-
tion, which rebuilt the site of the World
Trade Center towers after 9/11. In finance,
Whitehead will be long remembered for
another accomplishment: his insistence
on integrity and honesty as core busi-
ness principles. In 1970, he composed the
then 12, and now 14, principles of ethical
behavior that remain to this day the guid-
ing code of conduct at Goldman Sachs.
The first of these commandments is, “Our
clients always come first.” The last com-
mandment begins, “Integrity and honesty
are the heart of our business.”
I’ve seen these same core principles
apply in the realm of public service, where
they guided the development and imple-
mentation of policy in all of the govern-
ment positions where I’ve had the privi-
lege to serve. As a member of the Board
of Governors during the Greenspan years,
as chair of the Council of Economic Advi-
sors under President Clinton, as president
of the Federal Reserve Bank of San Fran-
cisco, as vice chair of the Federal Reserve
under Ben Bernanke and, finally, as Fed
chair. Throughout, I’ve seen Whitehead’s
principles commanding that our clients
come first and that our work be conducted
with professionalism, integrity and hon-
esty serve as the guide posts for our work
and those which defined our mission. For
government agencies, of course, the cli-
ents are the American people.
The most dramatic example of these
principles in action that I witnessed during
my career occurred just over a decade ago
when America and the global economy
were struck by a virulent financial crisis.
The downturn that followed that dramatic
financial crash was dreadful. Over 40%
of Americans experienced job loss, fore-
closure or an underwater mortgage. But
the consequences could have been far,
far worse. There could easily have been a
repeat of the Great Depression. To avoid
that, dedicated public servants in the Fed-
eral Reserve and other agencies gave it
their all, working night and day and col-
laborating to implement creative plans to
bring about the recovery we enjoy today.
Addressing the crisis demanded an array
of novel responses, and leaders and staff
throughout the Fed and other government
agencies moved with force and speed to
develop innovative lending programs and
to keep credit flowing to households and
businesses. Bold and unprecedented steps
to promote economic recovery were also
needed in monetary policy when short-
term interest rates were cut to near zero.
I believe that the government’s efforts to
address the financial crisis were success-
ful for exactly the reasons that Whitehead
emphasized in his code of ethics.
Two presidents, the Congress and
the public had confidence in and could
place their trust in organizations like the
Federal Reserve, relying on their deep
expertise in economics and finance, and
THE TICKER
knowing that their advice reflected rig-
orous analysis and a careful weighing of
costs, benefits and risks. They recognized
that the novel approaches these agencies
proposed reflected the efforts of coura-
geous public servants who placed their
clients—the American public—first. They
saw that public servants were acting with
integrity and honesty. The crisis called
forth numerous examples of courage and
self-sacrifice by the public servants with
whom I was privileged to work.
As one example, I especially remember
a senior Board staffer who ran all day and
all night conference calls to work through
a host of thorny issues regarding the stress
tests. As the ink on the test results dried,
she was rushed to the hospital with a heart
attack. A few weeks later, she was back on
the job.
I’ve often been asked what I most enjoyed
about the job of chair. Looking back, I can
say that my fondest memories are of days
filled with staff meetings—discussions of
policy with knowledgeable Fed staff and
Board colleagues around the table, where
we delved into the details and debated the
finer points of policy proposals.
The Fed is filled with professional, ethi-
cal, non-partisan staff who are dedicated
to improve the economy and financial
markets through their research and policy
work. They are talented, committed and
caring. They value objectivity and deci-
sions based on evidence. Their only inter-
est is the public interest. Even on the most
challenging days, indeed especially on such
days, I felt it a great privilege to be a mem-
ber of the Fed community. I’ve always
been grateful to have had the opportunity
to make a real difference and to work with
colleagues whom I respect and esteem.
This has been the fulfillment of aspirations
I have nurtured for my entire adult life.
Thus, I thank you for this award, and
I’d like to accept it on behalf of cur-
rent and past employees of the Federal
Reserve, especially including my colleague
Bill Dudley, who I thank for introduc-
ing me here tonight. Bill’s expertise and
insights informed all of our most impor-
tant decisions, and he exemplifies dedi-
cation to public service in the field of
finance. Thank you.
www.MoAF.org | Winter 2019 | FINANCIAL HISTORY 15