The former chairman of the Federal Reserve Ben Bernanke, who during eight years piloted the world’s largest economy through the worst financial and economic crisis since the Depression of last century, is now reaping the fruits of his success.
During those eight years Bernanke’s salary was about 200,000 dollars a year. Now he makes that in just a few hours speaking to bankers, hedge fund billionaires and leaders of industry. This year alone, he is poised to make millions of dollars from speaking engagements.
Mr. Bernanke is following a well-trodden path that his predecessor, Alan S. Greenspan, and other Washington policy makers have taken. On the speaking circuit, he is putting just one foot through the revolving door between Washington and Wall Street, being paid by financial firms but not employed by one.
Investors are dealing with a US economy that is in large part the creature of Fed policies under Mr. Bernanke, and they are willing to pay top dollar for his words of wisdom as a result.
Mr. Bernanke has agreed to speak with a Middle Eastern bank, private equity firms and trade associations, as well as at investment bank get-togethers, charging his hosts fees that range from 200,000 dollars in the United States and 400,000 for engagements in Asia. While he has dined with hedge fund managers at small events arranged by investment and brokerage firms including JP Morgan Chase, some Wall Street firms have balked at the high fees.
For many investors, the big question is when and how quickly interest rates will rise. Some Wall Street firms like the institutional brokerage firm BTIG organize events for their top clients private dinners with important former officials like Mr. Bernanke to try to differentiate their offerings from those of their rivals.
But others are consciously passing up the opportunity to hire Mr. Bernanke. UBS and Goldman Sachs considered his fees too high, according to two people briefed on the discussions between Mr. Bernanke’s representative and the banks but not authorized to speak about either publicly.
It is not unusual for senior government officials to join the speaking circuit or take lucrative jobs in the private sector after leaving public office.
Mr. Greenspan was hired to consult for the hedge fund Paulson & Company, Deutsche Bank, and the bond investment firm Pacific Investment Management Company after stepping down as Fed chairman. After leaving the top job at Treasury, Timothy Geithner joined the private equity firm Warburg Pincus.
And Mr. Bernanke is free to speak about his views on the economy as long as he does not breach any confidentiality agreement.
“If they are saying something that they were saying as a public official, is there something wrong with that?” Mr. Greenspan said.
Though Mr. Bernanke has been busy traveling these days, he spends most of his time as an economic studies fellow at the Brookings Institute and is working on a book about his time at the Fed. He also delivers pro bono speeches and does not always pocket all the fees, a spokeswoman for Mr. Bernanke at the Brookings Institution said. “In addition, he is donating hundreds of thousands to charity,” she added.