John Exter (September 17, 1910 – February 28, 2006) was an

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, member of the Board of Governors of the United States

Federal Reserve System The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...

, and founder of the

Central Bank of Sri Lanka The Central Bank of Sri Lanka ( CBSL; si, ශ්‍රී ලංකා මහ බැංකුව, Sri Lanka Maha Bankuwa) is the monetary authority of Sri Lanka. It was established in 1950 under the Monetary Law Act No.58 of 1949 (MLA), it is a ...

. He is also known for creating ''Exter's Pyramid.''

Life and career

Exter was born in 1910 and graduated from the

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(1928–1932). He then went to the Fletcher School of Law & Diplomacy and in 1939, to

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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 The Massachusetts Institute of Technology (MIT) is a private land-grant research university in Cambridge, Massachusetts. Established in 1861, MIT has played a key role in the development of modern technology and science, and is one of the ...

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 The Central Bank of Sri Lanka ( CBSL; si, ශ්‍රී ලංකා මහ බැංකුව, Sri Lanka Maha Bankuwa) is the monetary authority of Sri Lanka. It was established in 1950 under the Monetary Law Act No.58 of 1949 (MLA), it is ...

. 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

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(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

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, 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,

gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile me ...

forms the small base of most reliable

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, and asset classes on progressively higher levels are more

risk In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environm ...

y. The larger size of asset classes at higher levels is representative of the higher total worldwide

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of those assets. While Exter's original pyramid placed

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debt Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. The ...

at the top, today

derivative In mathematics, the derivative of a function of a real variable measures the sensitivity to change of the function value (output value) with respect to a change in its argument (input value). Derivatives are a fundamental tool of calculus. ...

s hold this dubious honor.

References

* * * * * Interview with Janet Exter Butler, daughter of John Exter *

External links

''Systemic Fiat Currency Risk & John Exter's Golden Triangle''
October 18, 2002, Jay Taylor {{DEFAULTSORT:Exter, John 1910 births 2006 deaths 20th-century American economists American expatriates in Sri Lanka American officials of the United Nations The Fletcher School at Tufts University alumni Governors of the Central Bank of Sri Lanka Harvard Graduate School of Arts and Sciences alumni Massachusetts Institute of Technology faculty World Bank people College of Wooster alumni