John Exter was an

American American(s) may refer to: * American, something of, from, or related to the United States of America, commonly known as the "United States" or "America" ** Americans, citizens and nationals of the United States of America ** American ancestry, p ...

economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...

, 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. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of ...

, and founder of the

Central Bank of Sri Lanka The Central Bank of Sri Lanka ( CBSL; ), known until 1985 as the Central Bank of Ceylon, is the central bank of Sri Lanka. It was established in 1950 under the Monetary Law Act No.58 of 1949 (MLA) and in terms of the Central Bank of Sri Lanka Ac ...

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

Life and career

Exter was born in 1910 and graduated from the

College of Wooster {{Infobox university , image = College of Wooster seal.png , image_upright = .6 , name = The College of Wooster , former_names = University of Wooster (1866–1915) , motto ...

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

Harvard University Harvard University is a Private university, private Ivy League research university in Cambridge, Massachusetts, United States. Founded in 1636 and named for its first benefactor, the History of the Puritans in North America, Puritan clergyma ...

for graduate work in economics because of his interest in understanding the causes of the

Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...

. After a stint at the

Massachusetts Institute of Technology The Massachusetts Institute of Technology (MIT) is a Private university, private research university in Cambridge, Massachusetts, United States. Established in 1861, MIT has played a significant role in the development of many areas of moder ...

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; ), known until 1985 as the Central Bank of Ceylon, is the central bank of Sri Lanka. It was established in 1950 under the Monetary Law Act No.58 of 1949 (MLA) and in terms of the Central Bank of Sri Lanka Ac ...

. In 1953, he became the division chief for the Middle East at the

International Bank for Reconstruction and Development The International Bank for Reconstruction and Development (IBRD) is an international financial institution, established in 1944 and headquartered in Washington, D.C., United States; it is the lending arm of World Bank Group. The IBRD offers lo ...

. In 1954, the

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 responsible for the Second District of the Federal Reserve System, which encompasses the New York (state), State of New York, the 12 norther ...

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, N.A. ("N. A." stands for " National Association"; stylized as citibank) is the primary U.S. banking subsidiary of Citigroup, a financial services multinational corporation. Citibank was founded in 1812 as City Bank of New York, and ...

(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 Council on Foreign Relations (CFR) is an American think tank focused on Foreign policy of the United States, U.S. foreign policy and international relations. Founded in 1921, it is an independent and nonpartisan 501(c)(3) nonprofit organi ...

, the Committee for Monetary Research & Education, the

Mont Pelerin Society The Mont Pelerin Society (MPS), founded in 1947, is an international academic society of Economist, economists, Political philosophy, political philosophers, and other Intelligentsia, intellectuals who share a classical liberal outlook. It is hea ...

, 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; it has chemical symbol Au (from Latin ) and atomic number 79. In its pure form, it is a brightness, bright, slightly orange-yellow, dense, soft, malleable, and ductile metal. Chemically, gold is a transition metal ...

forms the small base of most reliable value, 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 environ ...

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

notional ::''See Notional amount or Notional profit for economic terms '' Notional (born February 1, 2004, in California) is a retired American Thoroughbred racehorse. He was sired by In Excess and out of the mare Truly Blessed. His damsire, French Depu ...

value of those assets. While Exter's original pyramid placed

Third World The term Third World arose during the Cold War to define countries that remained non-aligned with either NATO or the Warsaw Pact. The United States, Canada, Taiwan, Japan, South Korea, the Southern Cone, NATO, Western European countries and oth ...

debt Debt is an obligation that requires one party, the debtor, to pay money Loan, borrowed or otherwise withheld from another party, the creditor. Debt may be owed by a sovereign state or country, local government, company, or an individual. Co ...

at the top, today

derivative In mathematics, the derivative is a fundamental tool that quantifies the sensitivity to change of a function's output with respect to its input. The derivative of a function of a single variable at a chosen input value, when it exists, is t ...

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