The resignation of the reassuring figure of US treasury secretary, Mr Robert Rubin, sent a tremor through the financial markets yesterday but the succession of his number two, Mr Larry Summers, has helped to restore confidence. The departure of the former co-chairman of Goldman Sachs has been expected since the beginning of the year when Mr Rubin, who is 60, indicated he was anxious to go back to the private sector. He also wants to give Mr Summers a decent period in office, as the present administration ends in January 2001.
The White House spokesman, Mr Joe Lockhart, said: "Secretary Rubin will be leaving after playing an extraordinarily central role in this administration".
Under the careful guidance of Mr Rubin and Federal Reserve chairman Mr Alan Greenspan, the US economy roared ahead while inflation stayed low and unemployment dropped steadily. The performance of the economy was a great help to President Clinton when his administration was shaken by fund-raising and then sex scandals. In spite of these setbacks, Mr Clinton's poll ratings remained high and the Dow Jones index reached 11,000, an increase which was scarcely conceivable when he was first elected in 1992 and which boosted the President's standing with investors.
Mr Rubin, who was first appointed to head the National Economic Council in 1993, won the respect of the financial community for his handling of the Mexican currency crisis soon after he took over at the Treasury in January 1995. He swiftly arranged a $20 billion bail-out which Mexico was able to repay after several years.
Mr Rubin also had to restore confidence in the US dollar as it plunged against the Japanese yen. But he was criticised at the start of the Asian economic crisis in 1997 when the US decided not to contribute to the rescue effort for Thailand.
The US quickly got involved in the subsequent IMF operations to stabilise Indonesia and South Korea.
Unusually for a Washington political figure, Mr Rubin rarely if ever seeks the limelight and did not bother to set up home in the capital, preferring to commute back to his family in New York at weekends.
Mr Summers (45) is an extrovert who is seen as more liberal in economic matters than Mr Rubin although both are staunch Democrats. Unlike Mr Rubin, who came from Wall Street to Washington, Mr Summers has an academic background and when appointed professor of economics in Harvard in 1983 was the youngest tenured professor in the university's history.
