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Talk Persists That Volcker Will Take World Bank Job

October 10, 1985|Associated Press

WASHINGTON — Although Federal Reserve Board Chairman Paul A. Volcker has given no public signal that he wants the job, there is fresh speculation that he will be named next year to become president of the World Bank.

The speculation gained new currency this week with the announcement Monday that the World Bank's president, A. W. Clausen, will step down when his term expires next year.

Volcker has been sounded out and indicated some interest privately, say Administration sources who asked not to be named.

'Absolutely Untrue'

But Fed spokesman Joseph Coyne said it's "absolutely untrue" that Volcker is on the verge of leaving for the World Bank. That rumor "has been circulating for about 18 months," Coyne said.

Volcker's term as chairman of the Fed extends until August, 1987, while the World Bank opening will occur a year earlier, in July, 1986.

Volcker, first appointed as chairman by former President Jimmy Carter, has always left open the possibility that he might not complete his second four-year term as chairman. He recently has expressed irritation that the White House did not consult with him in filling two Fed vacancies.

Friction has grown between Volcker and White House Chief of Staff Donald T. Regan, according to sources close to both men.

The World Bank job is the kind of assignment that would appeal to the cigar-chewing, 6-foot 7-inch central banker, who has spent most of his career in the public sector.

Inflation Tamed

Jack Albertine, president of the American Business Conference, predicted that Volcker would make the move.

"He's pretty much accomplished everything he set out to do at the Fed, including getting inflation down. He's at the pinnacle. If he goes out now, he goes out on top," Albertine said.

"You hear that he could be making $5 million a year in private enterprise," said David Jones, an economist with Aubrey G. Lanston & Co. "But that's not how Volcker thinks. The World Bank would be the kind of spot that would appeal to his sense of public duty."

A move to the World Bank would represent a large pay increase for Volcker, who is not a wealthy man. His current salary is $75,100, while the World Bank post pays $175,000 a year.

Clausen, chairman of the World Bank for the past four years, announced his decision to step down as president of the organization in a speech Monday in Seoul, South Korea.

An Administration source said the problem in persuading Volcker to take the World Bank position was couching the offer in a way that would not offend Volcker. Another potential factor is finding a successor acceptable to the chairman.

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