Tom Clausen, Bank of America CEO, World Bank Chief, Dies at 89
He died on Jan. 21 at Mills-Peninsula Medical Center in Burlingame, California, his wife, Helen, said yesterday in an interview. The cause was complications from pneumonia. Clausen was a resident of Hillsborough, California.
From his start as a part-time cash counter in a branch office in Los Angeles, Clausen rose through the ranks of Bank of America and its holding company, BankAmerica Corp., becoming president and chief executive officer in 1970. He was credited with reviving the bank during his second tenure there, from 1986 to 1990.
Even while presiding over Bank of America in the 1970s, when it was the nation’s largest bank, Clausen regularly spoke publicly about the needs of developing countries, according to a 1980 New York Times profile.
That focus paid dividends when President Jimmy Carter nominated him in 1980 to succeed Robert McNamara as president of the World Bank.
During Clausen’s five-year term, from July 1981 to June 1986, the World Bank struggled to help developing nations endure one of the worst recessions since World War II. It also had to respond to a shift in U.S. political attitudes under President Ronald Reagan -- “a new conservatism in economic policies which emphasized the role of the private sector and unobstructed markets,” in the words of a World Bank biography of Clausen.
In response to a global oil crisis, Clausen announced a 25 percent increase in lending for energy, including substantial sums for hydroelectric power projects, according to the biography. Clausen also oversaw the World Bank’s initial efforts to deal with a debt crisis that struck nations in Latin America, Eastern Europe and Africa in the 1980s. The crisis continued to simmer until 1989 and the creation of the Brady Plan for debt relief under President George H.W. Bush.
A 1984 New York Times article said the World Bank under Clausen “has taken little more than a bit part in the hair- raising financial dramas that have marked this decade. As a result, critics say, the institution is in danger of becoming irrelevant.”
Clausen defended his tenure, saying he accomplished what he could, considering that the bank had 147 different governments as members.
“There is nothing you can do that will please, or will benefit, all,” he said, according to the Times.
In a statement yesterday, World Bank President Jim Yong Kim praised Clausen as “very much a champion of developing countries.”
“His leadership made a significant difference in the lives of the poorest in the world by helping lower interest rates on World Bank loans to developing countries as well as speeding loan disbursements,” Kim said.
Alden Winship Clausen was born on Feb. 17, 1923, in Hamilton, Illinois, the son of Morton Clausen, publisher of the town’s weekly newspaper, and the former Elsie Kroll.
He graduated from Carthage College in Kenosha, Wisconsin, in 1944 and joined the U.S. Army Air Corps, serving as a meteorological officer. After the war he obtained his law degree from the University of Minnesota.
He took a part-time job at a Bank of America branch in Los Angeles while waiting for his future wife, Mary Margaret Crassweller, to agree to marry him. They were married until her death in 2001.
Hooked by finance, he earned a spot in the bank’s management training program. He was a senior vice president at 42.
His return to lead Bank of America as chairman and CEO in 1986, following his World Bank tenure, was a coda to his banking career. During his five-year absence, the bank had suffered loan and other losses that fanned speculation it would be taken over by the U.S. government. It had, among other problems, $8 billion worth of troubled loans to “Third World” countries, according to a 1989 Los Angeles Times article.
The former Helen Higgins, his wife since 2002, worked as his secretary starting in 1970 at Bank of America and the World Bank. She recalled in the interview how Clausen was called back to save Bank of America.
“He was out of the World Bank less than a week when he received a phone call from a member of the board asking him if he would please come back and, in essence, rescue the bank,” she said. “They needed him.”
Among other painful steps, Clausen presided over the elimination of 20,000 jobs and the sale of revenue-generating operations, according to the Los Angeles Times.
Clausen retired in May 1990, after Bank of America posted 1989 net income of $1.1 billion and had reinstated dividend payments, one of his goals. He became chairman of the bank’s executive committee.
Clausen’s survivors include two sons, Eric and Mark, and five grandchildren.
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