John Exter

John Exter
Born	1910
Died	2006
Occupation(s)	Economist, central banker
Years active	1940s–1972
Known for	Exter's Pyramid; Governor of the Central Bank of Sri Lanka

John Exter was a prominent American economist who served on the Board of Governors of the United States Federal Reserve System and established the Central Bank of Sri Lanka. He is most recognized for formulating the concept known as Exter's Pyramid.

Life and career

Born in 1910, Exter completed his undergraduate education at the College of Wooster between 1928 and 1932. To deepen his understanding of the Great Depression, he undertook graduate economic studies at both the Fletcher School of Law & Diplomacy and Harvard University.

During the Second World War, Exter was employed at the Massachusetts Institute of Technology before joining the Federal Reserve Board as an economist. In 1948, he provided guidance to finance ministers in the Philippines and Ceylon (present-day Sri Lanka) on the creation of central banking institutions.

He was appointed as the inaugural governor of the Central Bank of Sri Lanka, a position he held from 1950 until 1953. Subsequently, in 1953, Exter assumed the role of division chief for Middle Eastern affairs at the International Bank for Reconstruction and Development. The following year, he became vice president at the Federal Reserve Bank of New York, where he managed international banking and precious metals functions.

In 1959, Exter joined First National City Bank, then ranked as the world's second-largest bank, initially as vice president and advancing to senior vice president in 1960. His responsibilities included advising on international monetary matters and maintaining relationships with foreign central banks and governments. He opted for early retirement in 1972 to pursue private consultancy work.

Exter held memberships with several organizations, including the Council on Foreign Relations, Committee for Monetary Research & Education, Mont Pelerin Society, and Pilgrims of the United States. Together with his wife Marion, he had four children.

Exter's Pyramid

The model known as Exter's Pyramid or Exter's Golden Pyramid was developed by him to categorize asset classes based on their risk level and relative size. At its foundation lies gold, representing a small but highly secure asset base. Ascending through the pyramid are asset classes that carry greater risk and encompass larger global notional amounts. Initially, Third World debt occupied the apex as the riskiest asset; however, in contemporary times, derivatives have assumed this top position.

References

• Les Jones, "John Exter's Inverted Pyramid of Assets" (archived)
• Franklin Sanders, "A Moneychanger Interview: Mr. John Exter" (archived)
• W. A. Wijewardena, "John Exter: Central Banker for all times" (archived)
• "Deaths: Exter, John," The New York Times, 2006-02-28
• Interview with Janet Exter Butler, daughter of John Exter
• Letter to the Department of State from the Federal Reserve Board, Minutes of the Board of Governors of the Federal Reserve System, 1948-11-17

External links

• Systemic Fiat Currency Risk & John Exter's Golden Triangle (archived October 18, 2002), Jay Taylor