CRT’s Rogers Retires After Four Decades in U.S. Bond Market

Allan W. Rogers, who headed U.S. Treasury trading at Bankers Trust Corp. from 1977 to 1989, a period when the 10-year note’s yield went from 8 percent to almost 16 percent and back, retired from CRT Capital Group LLC.

Rogers, 66, who later managed bonds and currencies at Loews Corp., also served as head of the Primary Government Securities Dealers Association and on the Treasury Borrowing Advisory Committee, he said in interview last month from CRT’s headquarters in Stamford, Connecticut. The retirement was effective in April.

Rogers’s career included managing Bankers Trust’s fixed-income operations to a profit during 1987 U.S. stock market crash and spearheading repo reforms after the collapse of Drysdale Government Securities in 1982. New York-based Bankers Trust was acquired by Deutsche Bank AG in 1999.

Rogers began his career at Bankers Trust in 1970 after graduating from Dartmouth College, where he majored in economics. He worked for seven years in primary dealer sales before becoming head of the bank’s primary dealership. Primary dealers are Federal Reserve counterparties in open-market operations, trade securities with the central bank and are required to bid at Treasury debt auctions.

The onset of high volatility in U.S. interest rates by 1975 was a boon to Bankers Trust, Rogers said. “We started to take massive short positions at a time when there were no futures or special repo markets.”

Managing Risk

In September 1987, following a period of steep gains for U.S. equities and rising Treasury yields, Rogers said he had become concerned that a significant reversal would happen and forbade the firm’s traders from taking short positions in sovereign bonds for hedging purposes. The decree applied to Eurobonds, municipals, mortgages and swaps, he said.

The decision “involved managing risk across departments in a way that wasn’t common then and still isn’t common,” Rogers said in the telephone interview. The result: “We avoided having hedge losses wipe out our trading gains.”

Rogers was president of the Primary Government Securities Dealers Association in 1982, when Drysdale failed after defaulting on payments due to repo counterparties. He pushed the Fed to adopt repo accounting changes that would prevent future occurrences. “I did not win a lot of friends in the dealer community as a result,” he said.

In a repurchase agreement, one party provides cash to another in exchange for a security, and vice versa. Repos are typically used to finance holdings, meaning movements in the rates affect the cost of holding the securities in inventory.

Proprietary Trading

He served on the Treasury Borrowing Advisory Committee, the bond dealers and investors who meet quarterly with Treasury Department officials, from 1988 to 1991, and on the Federal Reserve Bank of New York’s Treasury Market Practices Group from 2009 to 2011.

After leaving Bankers Trust in 1991, Rogers worked at Goldman Sachs & Co. for three years as a proprietary trader. He joined Loews in 1998 and stayed for 13 years, managing its corporate treasury, insurance portfolio and pension funds, and hedging currencies for Diamond Offshore Drilling.

Rogers, who was born in Philadelphia and grew up in Milford, Connecticut, joined CRT about a year ago and traded the firm’s capital. Fed policy, including the asset purchases known as quantitative easing, or QE, helped drive the decision to retire.

“QE makes it difficult to make money doing prop trading in Treasuries,” Rogers said.

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