Karen Shaw entered the world of banking in 1977 for the most practical of considerations.

Bank of America offered her a position as its chief (and only) political consultant, even before she had finished her master's dissertation at the University of California at Berkeley.

As a political science student, she wasn't sure how many job offers would be coming her way after graduation, so she jumped at the opportunity.

"It was a tremendous challenge," she said. "They had never hired anyone to analyze legislative issues before."

Still, the challenge proved short-lived. Ms. Shaw moved to Washington in 1979 to lobby for BofA, but her tenure with the bank ended after a visit with Samuel H. Armacost, then the bank's chief executive officer.

Mr. Armacost said he "just didn't feel good about a young woman senior vice president," a sentiment that Ms. Shaw found particularly ironic coming from Mr. Armacost, himself very young to be running a big bank.

"I was likely to get older, but changing my sex wasn't going to happen," Ms. Shaw said. "So I quit."

Soon thereafter, Ms. Shaw started her own business, the Institute for Strategy Development.

She has developed into one of the capital's most respected sources of information about banking issues, as well as one of its most frequently quoted sources.

She also has close ties to the Democratic party. Her first candidate in 1992, Sen. Bob Kerrey, D-Neb., dropped out early, but she signed on as an adviser on banking issues to the Clinton campaign. Following the election, she was seriously considered as a candidate to head the Federal Deposit Insurance Corp.

That fell through, but Ms. Shaw continues to be one of the small group of experts consulted frequently by policymakers on Capitol Hill and within the administration about banking issues.

Risk Managers

The ISD's specialty is political risk management.

"In this industry, to plan without a sophisticated knowledge of government policy is asking for mistakes," she said. "I call what we do government risk management. I'd like to improve the ability of financial companies to anticipate regulations, not react to them."

Her organization also provides advice for foreign central banks in major industrialized countries, such as Japan, so Ms. Shaw spends a lot of time on the road. She even addressed the Japanese parliament in 1991.

"I had traveled to Japan a lot, but that was the first trip that a bunch of parliamentarians took me out to a karaoke bar," she said. "I was the only woman without a kimono or a slit in my skirt."

Karen Shaw

President, Institute for Strategy Development

1150 18th St. NW

Washington, D.C. 20036

202-296-5240

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