NEW YORK (TheStreet) -- She's a former Federal Reserve Governor who now sits on the board of Bank of America (BAC) and appears to have grasped risks to the subprime mortgage market ahead of both Alan Greenspan and Ben Bernanke: so why have so few people heard of Susan Bies?
Prior to the crisis, Bies was one of the highest placed officials at the Federal Reserve warning that a subprime mortgage boom was inflating a soon-to-bust housing market. Transcripts released by the Fed show Bies warned early-and-often of the risks that shoddy 'teaser rate' mortgages posed to consumers, and the multitude of ways banks could get burned in the securitization process.
Now, as a member of Bank of America's Board of Directors, Bies is an overseer of one of America's largest lenders. Bies also stands out as a possibly unheralded part of Bank of America's still-muddled recovery strategy, as the firm tries to recover from billions in subprime mortgage losses, lawsuits, and a newly unveiled probe by the U.S. Department of Justice.
"You would think she would have a little more responsibility given her background," Daniel Marchon, a Raymond James banking analyst, said in a telephone interview.
Quietly, Bank of America is undergoing a revamp of its lending operation that appears, on the surface, consistent with Bies' most significant work and commentary as a Fed governor.
At a Fed that was generally inattentive to the risks building in the housing market during the boom years, Bies created committees inside the Central Bank to prepare comparative system-wide analysis of banks' mortgage underwriting practices, the scope of their derivatives trading and the quality of their daily operations.