Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Wednesday, May 12, 1999 Published at 21:20 GMT 22:20 UK


Business: The Economy

Rubin to resign

Robert Rubin: A key figure behind the current US economic boom

US Treasury Secretary Robert Rubin is to resign, the White House has confirmed.


Richard Quest speaking from New York: "He's been wanting to go for some time"
Mr Rubin, 60, a former investment banker, is widely credited by Wall Street with the policies that have caused the US economy to boom in recent years.

His current deputy, Larry Summers, will replace him, President Bill Clinton confirmed.


[ image: The US Treasury Secretary helped to steer President Clinton's economic policy]
The US Treasury Secretary helped to steer President Clinton's economic policy
"Secretary Rubin will be leaving after playing an extraordinarily central role in this administration as far as our outstanding record of fiscal discipline and turning the economy around," said presidential spokesman Joe Lockhart.

US stock markets reacted badly, with the Dow Jones index of leading US companies plummeting 200 points when the news first broke.

However they quickly recovered most of that lost ground.

"Because of the suddenness and the unanticipated move, the markets were taken totally aback by the resignation," said Ned Riley, chief investment officer at BankBoston.
Paul Reynolds: "Rubin is credited with bringing down the budget deficit"

But John Wiliams, Chief Global Markets Economist with Bankers Trust said: "At the end of the day, it will not impact US policy at all.

"Certainly, Greenspan's policy will not change. Mr Summers will try to keep those policies. We may see volatility in the near-term, but over the long-run this should not hurt market confidence."

Under Secretary of State Stuart Eizenstat will be promoted to the post of deputy Treasury Secretary.

Architect of the boom

The Treasury Secretary's departure was not unexpected. It has long been rumoured that he wanted to return to the private sector.

His wife has never moved to Washington, living in New York throughout his term in office.

Mr Rubin, who made millions in a 26-year career on Wall Street, took office as Treasury Secretary in January 1995 after a stint as head of the White House National Economic Council.

He has been widely credited with steering President Clinton's economic policies, including the budget cuts which helped set the nation on course for its first balanced budget in decades.

London FTSE 100
UK share prices
Dow Jones
World markets
Foreign exchange
His tireless campaign for a strong US dollar has boosted the health of the US economy, now in its ninth year of an unbroken expansion.

As the brains behind several multi-billion dollar IMF rescue deals, he also played a pivotal role in restoring a degree of market stability after Asia's crisis started in the summer of 1997.

"We've seen a golden age of development under his leadership. It will be difficult to replace him," said David Jones, chief economist at Aubrey G. Lanston and Co in New York.

Mr Rubin has long been viewed as a possible top candidate for the chairmanship of the Federal Reserve if Chairman Alan Greenspan should choose to retire.

The US Secretary will remain at the Treasury until July.

Larry Summers, 44, a former Harvard economics professor, has been in the Treasury's number-two spot since August 1995.

Mr Jones added: "Summers is respected for his intelligence and economic brilliance but not for his diplomacy or market understanding. He has sort of taken on the same market-oriented views. But he has to prove himself."

But Bank of England Deputy Governor Mervyn King said he was looking forward to working with Mr Summers.

He said: "I have known Larry Summers as a friend and colleague since graduate school days.

"He is one of, if not the, brightest economist of his generation."





Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Economy Contents


Relevant Stories

12 May 99 | The Economy
Robert Rubin, the man Wall Street trusts

12 May 99 | The Economy
Robert Rubin, a hard act to follow

30 Apr 99 | The Economy
US economy storms ahead

31 Mar 99 | The Economy
US growth explosion

14 Jan 99 | The Economy
Great '98 for US economy





In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree