Bankers Trust New York Corp. snapped up Eugene A. Ludwig Tuesday, bringing yet another former high-ranking government official into its fold.

Mr. Ludwig, who just completed a five-year term as comptroller of the currency, will become one of six Bankers Trust vice chairmen on May 11. He will direct risk-management, internal auditing, and regulatory affairs.

It is the same post that first lured former Deputy Treasury Secretary Frank N. Newman to Bankers Trust in 1995. Mr. Newman became chairman and chief executive of the $140 billion-asset holding company in 1996.

Analysts said Bankers Trust can clearly use Mr. Ludwig's legal expertise to remain on the right side of regulators. The company is unusual among banks because of its stable of complex derivatives and securities trading activities. And last year it picked up a securities underwriting unit, BT Alex. Brown.

Mr. Newman, for his part, said Mr. Ludwig's "insights into critical management issues and his knowledge of the industry will be highly valuable as we build on the impressive momentum of BT Alex. Brown."

In addition to Mr. Ludwig and Mr. Newman, former Federal Reserve Board Chairman Paul A. Volcker is associated with Bankers Trust. He joined the company's board in 1996 after Bankers Trust acquired Wolfensohn & Co., the mergers advisory firm he had led.

His new job provides Mr. Ludwig with a chance to practice many of the regulatory safeguards he pushed as comptroller albeit at a state-chartered bank. "We have made tremendous advances in risk management over last several years and refining Bankers Trust's operations in that area will be my primary focus," he said in an interview.

Analysts applauded the hiring.

"He brings terrific regulatory perspective, and it's particularly important for Bankers Trust to have that insight," said Lawrence W. Cohn, a banking analyst with Ryan, Beck & Co., in Livingston, N.J.

Joan T. Goodman, who follows Bankers Trust for the Pershing Division of Donaldson, Lufkin & Jenrette Inc., said the firm is determined to avoid a replay of the 1996 derivatives trading scandal, which gave the company a black eye and shaved $220 million from earnings.

"They have a big, volatile trading businesses, and Mr. Ludwig will likely be more careful than most people to make sure regulatory requirements are followed," she said

The company, which is expected to complete its acquisition of Natwest Group's European investment banking operations this week, needs a senior executive intimately familiar with international banking standards as it expands in global markets. Mr. Ludwig, a former member of the international Basel Committee on Banking Supervision, fills that bill, too.

Though Mr. Ludwig brings extensive industry contacts, analysts doubted that adding one more high-profile, ex-government official will generate much new revenue for the company. "I don't know whether he brings business in the door but I doubt if that's what they're looking for from him," Mr. Cohn said.

Mr. Ludwig said he plans to split his time between Washington and the company's New York headquarters. He and his family will maintain their primary residence in Washington.

Though he will oversee the bank's political activities, Mr. Ludwig said he will not personally lobby lawmakers.

The former comptroller said he was offered the job by Mr. Newman, a close friend, shortly before his term expired. Mr. Ludwig said he also weighed offers from other commercial and investment banks.

He would not identify the other suitors. But Merrill Lynch Co. is rumored to have been among them. John Heimann, another former comptroller, chairs Merrill's global financial institutions practice. He was out of the country and could not be reached for comment.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.