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Engine of Inequality, by Karen Petrou

The first book to reveal how the Federal Reserve holds the key to making us more economically equal, written by an author with unparalleled expertise in the real world of financial policy.

Following the 2008 financial crisis, the Federal Reserve’s monetary policy placed much greater focus on stabilizing the market than on helping struggling Americans. As a result, the richest Americans got a lot richer while the middle class shrank and economic and wealth inequality skyrocketed. In Engine of Inequality, Karen Petrou offers pragmatic solutions for creating more inclusive monetary policy and equality-enhancing financial regulation as quickly and painlessly as possible.

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“Petrou’s book uncovers a hidden engine of our skyrocketing inequality: financial-policy. In an accessible and engaging prose, Petrou takes us through the inner workings of monetary policy at the Fed and financial regulations, how they’ve made inequality worse and how they could instead be retooled to take us to a more equitable future. A novel look at the problem of inequality and bold ideas to help resolve it. A must read.”—Emmanuel Saez, Professor of Economics at the University of California Berkeley and author of The Triumph of Injustice

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Industry Expert

Federal Financial Analytics (FedFin) is a Washington-based financial services-consulting firm that has for decades attracted a high-powered clientele in Washington, on Wall Street, and among global central bankers. Since 1985 FedFin has provided a unique blend of analysis and strategic advice on public policy, regulatory, and legislative issues for industry and governmental clients doing business in the U.S. and abroad.

A proprietary think-tank for its clients, FedFin reviews critical federal and global policy developments in banking, insurance, asset management, and mortgage finance, analyzes them in great depth, and then advises clients on whether what they want can be made to work for them, within the policy environment and for the financial system. It is FedFin’s guiding principle to be an honest broker, and clients depend on the fact that the firm does not offer lobbying or any other services that could compromise its objectivity and independence.

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In the News

American Banker, Wednesday, May 8, 2024

May 8th, 2024|

Will Democrats stand by Gruenberg? By Clair Williams Lawmakers — mostly Republicans — let loose almost immediately after the release of an independent review of the Federal Deposit Insurance Corp.'s workplace culture, calling for the agency's chairman, Martin Gruenberg, to resign. Those calls, while neither entirely new nor unexpected, were [...]

American Banker, Friday, April 19, 2024

April 19th, 2024|

Is the Fed board eroding regional Fed banks' independence? By  Kyle Campbell  The Federal Reserve Board of Governors has a greater say over leadership at the reserve banks than it once did. But whether that benefits the central banking system is an open debate...Karen Petrou, managing partner of Federal Financial [...]

Marketplace, Wednesday, April 11, 2024

April 11th, 2024|

What do bank earnings tell us about the economy? By Mitchell Hartman It’s the second week of April, which means spring is in the air and daffodils, cherry trees and lilacs are blooming. Here at Marketplace, it also means earnings season is starting. Corporate profit-and-loss reports for the January-to-March quarter kicked [...]


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Economic Equality Blog

Economic Equality Blog is aimed at showing central banks and financial regulators how to put their formidable thumbs on the equality scale in favor of those whose income and wealth suffer so much in the wake of the great financial crisis.

Issues in Focus

The Vault

FedFin on: Pledging the Public Good

As our in-depth analysis earlier today makes clear, FHFA’s RFI on FHLB mission compliance outlines a regulatory rewrite intended to handcuff Home Loan Banks not just to the housing mission expressly set in law, but also to a broader vision of the public good the agency believes the System’s taxpayer benefits are meant to serve.  Home Loan Banks don’t exactly see it that way, but their hand is weak unless [...]

May 20th, 2024|Categories: The Vault|

FedFin on: FHLB Mission

FHFA is now advancing an in-depth 2023 report on the Federal Home Loan Banks (FHLBs) with an RFI intended to lay the foundation for regulatory revisions tightening the FHLBs’ mission and thus the extent to which members benefit from low-cost advances without also disbursing these benefits to promote affordable housing and the public interest.  Although the RFI does not take a position on key changes, the questions it poses and [...]

May 20th, 2024|Categories: The Vault|

Karen Petrou on: How FSOC Enables Systemic Risk

One can and should debate the extent to which nonbank mortgage companies (NBMCs) are as systemically-risky as FSOC says they are.  But it’s indisputable that, if FSOC believed what it said, then the paltry and politically-improbable recommendations it announced are proof of only one unhappy conclusion:  all FSOC can meaningfully think to do when it sees a systemic risk is figure out how to bail it out.  This is certainly [...]

May 20th, 2024|Categories: The Vault|Tags: , , , , , , , |
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