Volcker to Join Small Investment Banking Firm

Former Federal Reserve Board Chairman Paul A. Volcker said Wednesday that he will become chairman and part-owner of James D. Wolfensohn Inc., a small investment banking firm in New York that advises large corporations.

He will also serve part-time as a professor of international economic policy at Princeton University’s Woodrow Wilson School of Public and International Affairs, where he will teach courses and advise graduate students.

Volcker’s decision to join a small company was unexpected. Analysts had agreed that the former Fed chairman could have had his pick of virtually any firm on Wall Street. Friends said, however, that Volcker was attracted by the prospect of part-ownership in a smaller firm that would give him a greater personal say in decision making.

The Wolfensohn company specializes in venture capital and high-technology fields.

The posts will be the first jobs that Volcker, who is 60, has held in the private sector since 1969, when he ended a four-year stint as a vice president of Chase Manhattan Bank in New York.

He served as undersecretary of the Treasury for monetary affairs in the Administration of President Richard M. Nixon from 1969 through 1974, and was president of the New York Federal Reserve Bank from 1975 until August, 1979, when President Jimmy Carter appointed him chairman of the Fed.

He left that post last August after President Reagan’s White House loaded the Fed’s board of governors with appointees who were generally critical of Volcker’s policies. He was succeeded by economist Alan S. Greenspan.

Volcker, a graduate of Princeton, was a senior fellow at the Woodrow Wilson School during the 1974-75 academic year. The professor’s chair that he will hold there was endowed by Frederick H. Schultz, a former Federal Reserve governor.