John Exter
Encyclopedia
John Exter was an American
economist
, member of the Board of Governors of the United States Federal Reserve System
, and founder of the Central Bank of Sri Lanka
. He is also known for creating Exter's Pyramid.
for graduate work in economics because of his interest in understanding the causes of the Great Depression
.
After a stint at the Massachusetts Institute of Technology
during World War II, Exter joined the Board of Governors of the Federal Reserve System as an economist. In 1948 he served first as adviser to the Secretary of Finance of the Philippines and then to the Minister of Finance of Ceylon (now Sri Lanka) on the establishment of central banks.
Between 1950 and 1953, Exter was the founder governor of the Central Bank of Ceylon
. In 1953, he became the division chief for the Middle East at the International Bank for Reconstruction and Development
. In 1954, the Federal Reserve Bank of New York
appointed him vice president in charge of international banking and precious metals operations.
Exter left the New York Fed in 1959 to join First National City Bank
(then the world’s second largest bank) as a vice president. The next year he was promoted to senior vice president. As an international monetary adviser for the bank’s International Banking Group he had special responsibilities for relations with foreign central banks and governments. In 1972 he took early retirement to become a private consultant.
Exter was a member of the Council on Foreign Relations
, the Committee for Monetary Research & Education, the Mont Pelerin Society
, and the Pilgrims of the United States.
He and his wife Marion had four children.
forms the small base of most reliable value
, and asset classes on progressively higher levels are more risk
y. The larger size of asset classes at higher levels is representative of the higher total worldwide notional
value
of those assets. While Exter's original pyramid placed Third World
debt
at the top, today derivative
s hold this dubious honor.
People of the United States
The people of the United States, also known as simply Americans or American people, are the inhabitants or citizens of the United States. The United States is a multi-ethnic nation, home to people of different ethnic and national backgrounds...
economist
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"...
, member of the Board of Governors of the United States Federal Reserve System
Federal Reserve System
The Federal Reserve System is the central banking system of the United States. It was created on December 23, 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907...
, and founder of the Central Bank of Sri Lanka
Central Bank of Sri Lanka
The Central Bank of Sri Lanka is the monetary authority of Sri Lanka. It was established in 1950, two years after independence. The founder governor of the Central Bank of Sri Lanka was John Exter, while the minister of finance at the time was J.R...
. He is also known for creating Exter's Pyramid.
Life and career
Exter was born in 1910 and graduated from the College of Wooster (1928–1932). He then went to the Fletcher School of Law & Diplomacy and in 1939, to Harvard UniversityHarvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
for graduate work in economics because of his interest in understanding the causes of the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
.
After a stint at the Massachusetts Institute of Technology
Massachusetts Institute of Technology
The Massachusetts Institute of Technology is a private research university located in Cambridge, Massachusetts. MIT has five schools and one college, containing a total of 32 academic departments, with a strong emphasis on scientific and technological education and research.Founded in 1861 in...
during World War II, Exter joined the Board of Governors of the Federal Reserve System as an economist. In 1948 he served first as adviser to the Secretary of Finance of the Philippines and then to the Minister of Finance of Ceylon (now Sri Lanka) on the establishment of central banks.
Between 1950 and 1953, Exter was the founder governor of the Central Bank of Ceylon
Central Bank of Sri Lanka
The Central Bank of Sri Lanka is the monetary authority of Sri Lanka. It was established in 1950, two years after independence. The founder governor of the Central Bank of Sri Lanka was John Exter, while the minister of finance at the time was J.R...
. In 1953, he became the division chief for the Middle East at the International Bank for Reconstruction and Development
International Bank for Reconstruction and Development
The International Bank for Reconstruction and Development is one of five institutions that compose the World Bank Group. The IBRD is an international organization whose original mission was to finance the reconstruction of nations devastated by World War II. Now, its mission has expanded to fight...
. In 1954, 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,...
appointed him vice president in charge of international banking and precious metals operations.
Exter left the New York Fed in 1959 to join First National City Bank
Citibank
Citibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
(then the world’s second largest bank) as a vice president. The next year he was promoted to senior vice president. As an international monetary adviser for the bank’s International Banking Group he had special responsibilities for relations with foreign central banks and governments. In 1972 he took early retirement to become a private consultant.
Exter was a member 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...
, the Committee for Monetary Research & Education, the Mont Pelerin Society
Mont Pelerin Society
The Mont Pelerin Society is an international organization composed of economists , philosophers, historians, intellectuals, business leaders, and others who favour classical liberalism...
, and the Pilgrims of the United States.
He and his wife Marion had four children.
Exter's Pyramid
Exter is known for creating Exter's Pyramid (also known as Exter's Golden Pyramid and Exter's Inverted Pyramid) for visualizing the organization of asset classes in terms of risk and size. In Exter's scheme, goldGold as an investment
Of all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a hedge or harbor against economic, political, or social fiat currency crises...
forms the small base of most reliable value
Value (economics)
An economic value is the worth of a good or service as determined by the market.The economic value of a good or service has puzzled economists since the beginning of the discipline. First, economists tried to estimate the value of a good to an individual alone, and extend that definition to goods...
, and asset classes on progressively higher levels are more risk
Risk
Risk is the potential that a chosen action or activity will lead to a loss . The notion implies that a choice having an influence on the outcome exists . Potential losses themselves may also be called "risks"...
y. The larger size of asset classes at higher levels is representative of the higher total worldwide notional
Notional amount
The notional amount on a financial instrument is the nominal or face amount that is used to calculate payments made on that instrument...
value
Value (economics)
An economic value is the worth of a good or service as determined by the market.The economic value of a good or service has puzzled economists since the beginning of the discipline. First, economists tried to estimate the value of a good to an individual alone, and extend that definition to goods...
of those assets. While Exter's original pyramid placed Third World
Third World
The term Third World arose during the Cold War to define countries that remained non-aligned with either capitalism and NATO , or communism and the Soviet Union...
debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
at the top, today derivative
Derivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...
s hold this dubious honor.
External links
- Systemic Fiat Currency Risk & John Exter's Golden Triangle October 18, 2002, Jay Taylor