Bob Cox Remembrances

Friends and Colleagues Remember Bob Cox

John Lothian

John Lothian

Executive Chairman & CEO

Gerhardt (Kiko) R. Kalterherberg, Senior Manager – Strategic Corporate Development / M&A – Carl Zeiss Group
Bob and I met relatively recent for the first time at a conference in Europe in 2017.  He and his colleague Robert Steigerwald had just published a paper called A CCP is a CCP is a CCP, which I had come across prior.  It was a widely quoted paper during the conference and what he later told me, was his most successful paper he had ever written or co-authored.  
What I remember the most from this first meeting and what I have come to experience every time he and I would share a room was, what I would describe as a strong leadership character.  He got up during a panel discussion q&a session, communicated his thoughts in a clear manner on where and where not a certain panel discussion point seemed correct or off as well as why.
His words clearly carried weight.  In other circumstances, where I had a chance to speak to him in one-on-one situations, he would go out of his way to explain cause and effect relationships, specifically when it came to principles that touch (CCP) clearing houses.  He also was good for laugh and enjoyed life, so it appeared.  He embodied to me a role model in the policy space.
Bob, rest in peace.  Wishing the family and loved once who survive him all the best.

John McPartland, Senior Financial Markets Policy Advisor, Chicago Federal Reserve:

I believe I first met Bob Cox sometime in 1975.  He was a trainee rotating within various departments of the Continental Bank.  At the time, I was in the audit department verifying the existence and quality of non-possessory loan collateral, typically accounts receivable and finished inventory. I took Bob to a candy manufacturing company in North Chicago (the company that later became famous for making Jelly Belly jelly beans).  He caught on quickly.

Bob had and still has a subtle non-conformist streak to him.  While a lowly bank trainee, sitting at his walnut desk on the dollar bill green carpet on the opulent second floor banking hall of the building at 231 South LaSalle Street, rather than reading the Wall Street Journal as you might expect of a bank trainee trying to impress his mentors, Bob would read the New York Times, whilst smoking unfiltered Camels and drinking hot tea (no coffee, hot tea please).  Yes, we smoked at our desks in 1975.

At a later date, and much more to the point, Bob was rotating through the Securities and Commodities lending group, also located on the great banking hall that the second floor was (still is). It was there that he caught the eye of the legendary John Goodridge, one of the senior most commercial bankers then facing the futures industry, period.

About this time, Bob came to the realization that perhaps being a big city commercial banker wasn’t his thing. John Goodridge called up Bob Collins and Bob Cox got hired as a margin clerk at Green & Collins, a distant precursor to today’s RCG Direct. Green & Collins was a force on the Mid-America Commodity Exchange and a clearing member at the CBOT.  Bob looked after the many and diverse branch offices of Green & Collins and learned the business by touching it.

The Mid-America Commodity Exchange was located under the skylight of the Insurance Exchange Building at 175 West Jackson.  The Mid-Am (or the skid, as Bob lovingly referred to it) traded mini futures contracts, typically 1/5th the size of legacy futures contracts. Bob joins some very famous traders and non-traders that got their start on the Mid-Am trading floor (Richard Dennis) or in the Mid-Am Clearing House (Tom Hammond).

John Goodridge loaned Bob the money to buy a Mid-Am membership, and like many others, Bob decided to try his hand at floor trading.  He quickly emerged as the lead soybean broker at the Mid-Am. He was elected to the Mid-Am board of directors and was chairman of its Membership Committee and its Rules Committee.  The Mid-Am was probably then at its height. He also got married to a Wall Street Journal reporter. Save that thought.

About the same time, the London International Financial Futures Exchange (LIFFE) was approaching its third scheduled and its successful opening date. This event was not lost on the Monetary Authority of Singapore (MAS). On a visit to the MAS, David Taylor and Bob McKnew were blindsided by a request of the Deputy Governor of the MAS to write a white paper, examining the feasibility of starting a financial futures exchange in Singapore. Continental Bank resources were marshalled to do so. The white paper encouraged the MAS to pursue the concept. I have a copy of that white paper somewhere in my basement.

As time passed, Bob’s first marriage was declining, not unlike the time value of an option.  What he could not see was that the Mid Am had also reached its pinnacle and it would be painful for him to watch its decline from within.

Contemporaneous with all of these events was the entrance of bank parented FCMs.  As Continental Bank had the most to lose by competing with its own FCM customers, the business decision was made that I would start Continental Bank’s futures subsidiary but that the bank would be the very last money center bank to do so.

By early 1984, SIMEX was anticipating a mid-year inauguration. Continental Bank, having encouraged the MAS in this undertaking, felt obligated to send a first class team to Singapore to support the effort.

Also at this time, it was extremely lucrative to be an expatriate, working for an American company. Big apartment, marble floors, maid, cook, and a membership in a private club were standard accoutrements of the compensation package. I needed a high integrity floor manager and ideally one that knew Asian customs.  As it turned out, Bob grew up in Asia, spending much of his youth in Manila.

I told him that I felt that after the very painful divorce and the ensuing demise of the skid – which he could not anticipate because he was too close to it – that he needed a drastic change of venue. I persuaded Bob to take the position of SIMEX floor manager for Continental’s SIMEX clearing member.

In a particularly unusual move, the SIMEX Board held a mini-meeting prior to their general meeting to approve the applications of prospective clearing members. Singaporeans never forget a favor. The sole purpose of that meeting was to approve Continental Bank’s futures subsidiary one day before all of the rest so that it could rightly claim that it was the first SIMEX clearing member. I believe Fong Yew Meng, the first manager of the SIMEX clearing house may have had a hand in that.

But before we ship Bob off to the other side of the world, he met one Gail McCarthy, I believe on a blind date set up by a mutual acquaintance. Gail rather took a liking to this tall, distinguished-for-his-age gentlemen and didn’t care much for the fact that I had just sent him 12,000 miles away.

They stayed in touch.  One thing led to another and Gail decided to fly to Singapore to pay Bob a visit. I think, but I’m not sure, that that visit was supposed to be for two weeks, but it lasted considerably longer.

Continental’s futures subsidiary went on to become the largest clearing member on SIMEX, this notwithstanding the bank’s deposit run in early 1984. Through hard work and a bit of luck, Continental’s futures subsidiary had attracted the Nikkei 225 futures business of three of the top five investment banks, including Goldman Sachs.

In the category of “Ooops,” Continental Bank’s Primary Dealer issued a press release that it was shuttering its capital markets activities in Asia.  I think this was 1986. This, without having any conversation about it with its own SIMEX staff. Through the Herculean efforts of SIMEX and Goldman Sachs, Goldman Sachs held a special meeting of its partners and the SIMEX Board held a special meeting to approve Goldman Sachs Pte. Ltd. as a new SIMEX clearing member.  On a Friday afternoon in Singapore, one by one, the staff of Continental Bank’s futures subsidiary resigned. On the following Monday morning, they all reemerged as Goldman Sachs employees.

Bob’s career at Goldman Sachs began that day.

Mike Dawley, Goldman Sachs executive (retired):

Hi John, Thanks for recognizing Bob.

Bob and I worked together for many years. As I reflect on those times I can only recall joy. He was a great guy with many amazing qualities. Bob had so much knowledge of history both in the US and globally. He was my tour guide of historical sites whenever I visited with him.  I learned a lot over those years via our conversations and numerous trips to Asia.

Many were fearful of running into Bob on Mondays during college football season as he would share a detailed evaluation of every Northwestern play from Saturday. One generally needed to allocate a minimum of 30 minutes for the “recap.”

Bob was also an early steward in the clearing house risk space. We experienced many a crisis together and he passionately focused on the importance of protecting the system decades before Lehman and MF Global.

Bob couldn’t have been happier in his latest role at the Chicago Fed. He added tremendous value to their organization and his contributions to the industry have benefited us all.  My deepest condolences go to his wife Gail and their children. Bob will most definitely be missed.

Leslie Sutphen, Financial Markets Consulting LLC:

Bob was always a huge supporter of women in the industry and was very supportive of WILD and what we were trying to accomplish.  I served with him on the FIA Board when I was the head of the market technology division, and I found him to be a real creative thought leader in the industry.  I am going to miss him so much!

Robert S. Steigerwald, Senior Policy Advisor, Financial Markets Group, Federal Reserve Bank of Chicago:

Greetings John, and thank you for collecting these stories commemorating the life and work of my late friend and colleague, Bob Cox.

Bob was enormously generous with his time and kind to all who sought his counsel. This quality was reflected in many ways, including the way he interacted with the junior staff of the Shanghai Clearing House, who took to calling him “Uncle Bob.” I am told that it snowed heavily in Shanghai (a rare event) on Friday, the day Bob passed away. One of the SHCH staff wrote to tell me, “I believe it’s for him, my dearest UNCLE Bob.”

Bob also was hard driving – he pushed himself hard and expected others to push themselves as well. I’ll never forget trying to keep up with him after getting off a plane somewhere halfway around the world, early in the morning or late at night, pitch black outside and the glaring airport lights hurting my overtired eyes. Bob never wanted to get stuck on a long line at passport control, so you had to be prepared to kick into high gear to keep up with him. I don’t know where he found the energy.

Bob also had a keen sense of humor. I’ve attached a photo of him photographing me as I take a photo of the Bund and Pudong in Shanghai. I don’t know who took the picture of him (and me) – but I’m sure that he set the shot up. It reminds me of a common man’s version of Velasquez’s Las Meninas. Bob would have enjoyed that reference, I think.

There are so many things to say about Bob. Suffice it for now to say that I cherished my time with Bob. He was my colleague, a mentor and, best of all, a friend. I feel lost without him.

Derek West,  Chief Compliance Officer for the DTCC’s European Global Trade Repository business:

Like many people, I first met Bob while attending an industry conference event. I cannot recall which one or where, because we seemed to run into each other in all sorts of situations around the world. I do remember sitting at a lunch table beside this quiet, reserved gentleman who, after I muttered under my breath an inopportune retort to something the keynote speaker was saying at the time, smiled that wide, infectious smile, realizing he was not the only cynic at the table. Bob knew everyone and was always happy to introduce people and provide a pithy anecdote about how they met, or about that time in Hong Kong…

Bob’s team at the Chicago Fed are true caretakers of the financial markets. They work quietly in the background, nudging policy makers and industry alike to address risks that you can only identify when sitting back, taking the time to do real, quantitative and well-focused research, and bouncing ideas of like-minded policy and market nerds. Bob optimized this quiet, respectful and expert guidance counsellor for the markets. His shyness quickly evaporated when he got that glint in his eye and lost control of his smile to utter a clever witticism or note a critical mistake in someone’s argument. He was often the smartest guy in the room, but he wielded this power with great restraint and an ever-present kindness. I was fortunate to work alongside Bob and the Chicago Fed team for many years, and miss the doorway chats outside Rich Heckinger or Robert Steigerwald’s office, or at lunch with McP. And I will very much miss seeing Bob’s smiling face in London. And Singapore. And Chicago. And…

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