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Governors in Washington, constituted America’s central bank. The New York Fed had always been the executive arm of the Board, carrying out the operations decided each week by the Federal Open Markets Committee to control interest rates and money supply growth. New York also was responsible for intervening in foreign exchange markets in concert with other central banks to manage the rate of the dollar against other currencies. This task had increased enormously in significance since the historic decision in September 1985 when the United States reversed its earlier opposition to “managing” what were supposed to be free-floating exchange rates.
    But that was not all. The New York Fed was responsible for supervising the banks in its jurisdiction, which included seven of the nine biggest banks in the country. And the stock, bond, futures, government securities, and commodities markets that made their home in New York. And all the brokerage houses, investment banks, and dealers who operated in these markets. Propelled by the revolution in communications and the worldwide liberalization of financial markets, developments in New York had quickly outpaced the Fed’s ability to keep up with them.
    The phone remained blissfully quiet. Halden had asked his secretary to come in at eight, so he would at least have that formidable line of defense again. After the press conference yesterday, he had called in the heads of the commercial banks, brokerage houses, and investment banks for separate meetings. He wanted to get a picture of the markets and what was happening in the wake of the gold news. It was daunting. The sudden announcement had disrupted the balance the Fed had tried to maintain in the markets. The central bank had put out so many fires in the past few years, from Peruvian default to massive fraud in government securities trading. Who would have expected gold to shut down the markets? The massive flows of capital set in motion by news of the gold mine sabotage had simply been too big for the fragile structure of world finance to support.
    Then the quick flight to Washington, the briefings at Treasury, the meeting in the White House. Halden had been one of the men with the President before his broadcast. He let Hugh Roberts do the talking, though. After the President’s speech, Roberts had boarded an Air Force jet for Basel, and Halden returned to New York for meetings with aides that lasted till 2 a.m. No chance to get back out to Long Island, but it was not the first time Halden had spent the night in town.
    Carol Connors was standing in front of his desk. Halden blinked. Evidently she had made it home. The tall brunette in front of him looked as fresh as though she were just coming back from vacation. Her muted lavender suit and pink blouse brought a welcome dash of color to the somber November morning.
    Not for the first time, Halden was a bit in awe at the woman he had promoted to chief of her section. The Fed had been relatively liberal in its hiring practices, particularly in the economics department. Carol’s place at the Fed had been firmly established by the time Halden came to New York: Princeton undergrad—Halden had noted with favor—Columbia School of International Affairs, followed by a doctorate and seven years of steadily increasing responsibility. A striking, graceful woman, Carol certainly did not fit any stereotypes about backroom drudges. Yet she had toiled long hard hours on tasks that often seemed thankless. With time, however, their accumulated impact had given her a solid reputation within the bank.
    The first reports she had prepared for Halden, on London’s Big Bang, the massive deregulation of the London stock market and its impact on dollar flows, had been brilliant. Halden had assigned her increasingly to the problems of the debt crisis. Not content with her written reports, he had conferred with her more often, asked her to sit in on top-level meetings, and even had her take part in the