John J. Balles was the ninth president and chief executive officer of the Federal Reserve Bank of San Francisco. He assumed the office in September 25, 1972, and retired February 1, 1986, having reached the Bank’s mandatory retirement age after thirteen years of service.
Balles was born in 1921 and was a native of Freeport, Illinois. He received bachelor’s and master’s degrees from the State University of Iowa and earned a doctorate in economics from Ohio State University. He coauthored the book Principles of Money and Banking while serving as a faculty member in the economics department at Ohio State.
Balles first joined the Federal Reserve System in 1954 as a senior financial economist and later as the vice president-in-charge of the credit department at the Federal Reserve Bank of Cleveland. He was also a special advisor on monetary policy to the Bank’s president.
He left the Federal Reserve System in 1959 to serve as senior vice president over the economic and corporate planning office at Mellon National Bank in Pittsburgh, Pennsylvania, where he worked for thirteen years before joining the San Francisco Fed in 1972 as president and chief executive officer.
During his tenure as the president of the San Francisco Fed, Balles led the Reserve Bank through a period of dramatic change, as the Federal Reserve System was evolving from demands in the economy and the financial system. Balles participated in the development of monetary targeting resulting from the Federal Reserve Reform Act of 1977. The Full Employment and Balanced Growth Act of 1978 established full employment as a second goal of monetary policy and required the Federal Reserve to report to Congress on its policy twice a year.
Balles oversaw the implementation of the Depository Institutions Deregulation and Monetary Control Act of 1980. The Act increased the scope of the Federal Reserve in monetary control and broadened the Fed’s role in offering direct payments services to all banks, thrifts, and credit unions.
To support the increasing demands placed on the Federal Reserve during this time, Balles expanded Bank staff and branch offices. Under his leadership, two new buildings were constructed. The new San Francisco head office opened in 1983, and the new Los Angeles branch building was completed in 1986. Balles said of the San Francisco site, “We believe that the new building not only represents a quality contribution to the architecture of America’s most beautiful city, but embodies as well a firm commitment to enhance the economic vitality of downtown San Francisco.”1
Balles was a known advocate of the Federal Reserve’s anti-inflation policies. He believed a reduction in the federal budget deficit would foster sustainable economic growth and lower real interest rates. Balles believed the future of the Twelfth Federal Reserve District economy was closely tied to development in the Pacific Basin and forged closer ties to other central banks in that region.
Following his retirement, Balles served for several years as an independent business consultant to Pacific Gas & Electric Co. and to SRI International, as well as an outside director to several other companies.
Balles died in 2005.
Written by the Federal Reserve Bank of San Francisco. See disclaimer.