WASHINGTON - Susan M. Phillips has just finished her freshman year at Federal Reserve University.
One year ago, the former University of Iowa professor and administrator packed her bags - and and her old economics textbooks - and moved east to the center of economic power, policy, and research.
As the newest member of the Federal Reserve Board, she spent the year studying monetary policy and boning up on the ins and outs of banking regulation.
"In a sense, the environment here is a bit like being at a university, but without the students," she says. "And with lots of professors - and no football team."
As part of her previous job as vice president for finance at Iowa, Ms. Phillips, 48, oversaw the school's intercollegiate athletic programs. A black rocking chair with the school insignia - a gift from the women's athletic program - occupies a place of honor near the fireplace in her corner office at the Fed.
Her experience, of course, extends well beyond college sports. Ms. Phillips taught corporate finance for many years and is an expert in sophisticated financial instruments.
She was the first to head a federal financial agency, chairing the Commodity futures Trading Commission under President Reagan from 1983 to 1987.
At the Fed, Ms. Phillips has been most vocal on regulatory issues. One of her first tasks as a governor was leading an internal review of the regulatory burden resulting from recent Congressional actions.
"I've been involved in regulation of securities and commodities, and banks are much more heavily regulated," she says. "The board is quite concerned about this. We don't like a lot of this stuff we're having to do."
When Fed chairman Alan Greenspan formed a committee on derivative investment products last month, he asked Ms. Phillips - understandably, given her expertise - to lead the effort.
Many have called for more careful oversight and stronger rules. But Ms. Phillips believes that many people misunderstand both the risk and the usefulness these sophisticated instruments offer banks.
"It's nice to know that there's someone up there at the Fed who knows about our products," says John M. Damgard, president of the Futures Industry Association.
Despite her background, when Ms. Phillips was nominated in 1991, critics groused that she had little experience with monetary policy.
She has until Jan. 31, 1998, when her term expires, to prove the skeptics wrong. While she has been one of the lower-profile governors so far, she has hardly been cutting class. Industry representatives praise her openness and deliberate approach to the new subjects she has been mastering.
"She's a very pleasant person, easy to talk to, and not aloof or intimidating," says James McLaughlin of the American Bankers Association. "She brings a good mix of the practical and the academic." …