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So far Arezou Rafikian has created 1970 blog entries.
4 04, 2024

Daily040424

2024-04-04T17:00:02-04:00April 4th, 2024|2- Daily Briefing|

Hsu, Gruenberg Skirt CRA Legal Battle

The CRA-related remarks today from Acting Comptroller Hsu and Chair Gruenberg were considerably more muted than those yesterday from Vice Chair Barr, although Mr. Gruenberg expressly defends the new rule despite the pending legal challenge.

FRB-NY: Life, P&C Insurance Poses Climate Risk to Financial Markets

The Federal Reserve Bank of New York yesterday posted a brief focusing on financial-market risk due to climate change, concluding that there is some of potentially systemic magnitude.  This finding is based on a nine-month-old staff report focusing specifically on the insurance sector.

FDIC Presses Banks to do More in LMI Communities

Previewed in remarks by Chair Gruenberg this morning, the FDIC today released its economic inclusion strategic plan calling on banks to invest in LMI and underbanked communities.

Daily040425.pdf

4 04, 2024

American Banker, Podcast, April 4, 2025

2024-04-04T15:04:14-04:00April 4th, 2024|Press Clips|

Buy the People: Why everyone loves to hate the Fed

By Kyle Campbell

Click the link below to listen to Kyle Campbell’s podcast on economic  populism.  It’s a terrific survey of Fed history with authoritative insiders including Federal Financial Analytics‘ managing partner Karen Petrou, and then – my bit – an assessment of why recent monetary  policy has made so many Americans so angry and how that affects the political outlook , especially this November.

https://www.americanbanker.com/podcast/buy-the-people-why-everyone-loves-to-hate-the-fed

2 04, 2024

Politico Morning Money, Tuesday, April 2, 2024

2024-04-02T10:37:12-04:00April 2nd, 2024|Press Clips|

By MICHAEL STRATFORD and ZACHARY WARMBRODT

First look: A bank merger rethink — MM has a preview of a provocative bank M&A talk that Federal Financial Analytics managing director Karen Petrou will give at a Kansas City Fed workshop today.

As banking agencies signal tougher scrutiny of proposed mergers, Petrou makes the case that regulators are failing to use tools they already have to address conflicts of interest, concentration and unfair competition ahead of M&A reviews.

“How much of this is necessary in merger review and how much could be accomplished by better prudential regulation along with vigilant supervision and meaningful enforcement?” she says in remarks prepared for her talk, which you can read here.

https://www.politico.com/newsletters/morning-money

2 04, 2024

Daily040224

2024-04-03T10:42:03-04:00April 2nd, 2024|2- Daily Briefing|

Bowman Attacks “Regulation by Application”

FRB Governor Bowman today expressed concerns about the regulatory agencies’ evolving approach to M&A, stating that pending reforms may exacerbate existing procedural problems such as long delays and regulatory uncertainty that may undermine the viability of banks.

OFR Examines Stress-Event LCR

The OFR today published a brief examining the performance of components of the LCR on U.S. GSIBs in response to the COVID-19 shock.  The brief finds that flow volatility sharply increased and remains elevated for unsecured wholesale and retail deposits and was particularly pronounced for brokered deposits.

FRB-PHL: Majority of Consumers Receptive to CBDC

The Federal Reserve Bank of Philadelphia today released a report on CBDCs, finding that a majority of consumers were generally receptive to a U.S. CBDC despite obstacles to widespread CBDC consumer adoption.

Daily040224.pdf

1 04, 2024

2024

2024-05-15T09:33:23-04:00April 1st, 2024|Speeches & Testimony|

The What Keeps Me Up Department:
Trump II and Global Systemic Risk
Karen Petrou
Managing Partner
Federal Financial Analytics, Inc.
Prepared for Annual ACTUS Conference
Washington, D.C.
May 15, 2024

Read remarks

 

Horizontal Bank Mergers:
Critical Industry Infrastructure in Harm’s Way
Karen Petrou
Managing Partner
Federal Financial Analytics, Inc.
Prepared for Federal Reserve Bank of Kansas City
April 2, 2024

Read remarks

28 03, 2024

Daily032824

2024-03-29T10:36:38-04:00March 28th, 2024|2- Daily Briefing|

House GOP Resolution Challenges CFPB Credit-Card Late-Fee Rule

As promised, the GOP resolution to overturn the CFPB’s credit-card late-fee rule has now been introduced (see FSM Report CREDITCARD37).  HFSC Rep. Ogles (R-TN) introduced H.J. Res. 121 on Tuesday, adding another attack to the rule which is already being challenged in court.

FinCEN Advances Limited KYC Reform

Acting on its longstanding promise, FinCEN in consultation with banking agency and NCUA staff today issued a RFI examining new KYC approaches, including permitting banks to collect partial SSN information directly from the customer backed by third-party sources that provide full SSN prior to account opening.

BIS: Statement Revisions Augur Greater Bank Risk

Doubtless reflecting Credit Suisse’s failure, the BIS today released a study on risk information derived from pre-publication revisions to bank financial statements sent to supervisors, finding that the frequency of revisions is highly correlated with a bank’s subsequent CAMELS rating downgrade, higher future average probability of borrower default, and greater distance to default score.

Daily032824.pdf

27 03, 2024

FedFin on: Bank Merger Policy

2024-03-27T16:44:22-04:00March 27th, 2024|The Vault|

Following its 2022 request for input, the FDIC has released a formal proposal that would redefine the agency’s bank-merger policy into one that will make it difficult for all but the smallest and simplest transactions within its jurisdiction to have the clear prospects for approval usually necessary in non-emergency transactions, subjecting other M&A applications to protracted review with a high likelihood of denial.  Strategic alliances involving nonbanks and/or nonbank affiliates and BHCs with nonbank activities may also come under critical FDIC scrutiny, complicating transactions otherwise under the FRB or OCC’s review….

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

25 03, 2024

Time, March 25, 2024

2024-03-27T10:31:30-04:00March 25th, 2024|Press Clips|

Why Is Trump’s Truth Social Worth Billions? Experts Have Theories

By Eric Cortellessa

On the cusp of a financial crisis, Donald Trump got help from an unlikely source: His struggling social media platform. Investors approved a plan on Friday to take Truth Social public, increasing his net worth by billions as he’s drowning in legal expenses and owes New York state half a billion dollars in a civil fraud case. The company will start trading on the ​​Nasdaq exchange on Tuesday. But the financial statements of Trump’s firm show scant evidence of a booming business worthy of the $4.7 to $5.6 billion market capitalization reported on Monday. Trump Media & Technology Group, which owns Truth Social, lost money last year, according to regulatory filings….It’s not the first time that markets have embraced social media companies at levels that appear to exceed their value, according to Karen Petrou, managing partner of Federal Financial Analytics. Other examples, she cites, include Uber and WeWork.“These kinds of valuations that seem insane are surprisingly common,” says Petrou, “They’re less common than they used to be when interest rates were low. All sorts of firms have been financed significantly, or capitalized through IPO, well above their estimated value. Some of them had no revenues for years. But the markets were chasing yield.”In other words: they were taking high risks they thought could lead to high rewards. That could also be the case with the lagging Truth Social, where shareholders are betting that a …

20 03, 2024

GSIB24

2024-03-20T12:17:56-04:00March 20th, 2024|5- Client Report|

GSIB-Designation Methodology

Reflecting concerns expressed about banks that window-dress key regulatory data as the post-crisis framework took shape,the Basel Committee has now issued a request for views on how to prevent this when it comes to GSIB calculations related to their surcharge or possible designation.  This is now done annually, but Basel wants to require averaging on perhaps a daily basis to prevent presentations of very short-term data that under-estimate a designated GSIB’s or potential designee’s systemic footprint as Basel has decided to calculate it.

GSIB24.pdf

19 03, 2024

Daily031924

2024-03-20T11:57:36-04:00March 19th, 2024|2- Daily Briefing|

Progressive Dems Keep Pressure on Powell

 

Ahead of today’s FOMC meeting, progressive Democrats again sent a letter to Chair Powell calling for an interest-rate reduction timeline on grounds that higher-for-longer adversely affects the public good.  Signed by Sens. Warren (D-MA), Sanders (I-VT), and nineteen House Democrats, the letter calls the Fed’s monetary policy “excessively contractionary,” stressing its negative impacts on the housing market and financial stability.

HFSC GOP Takes on GSE Title-Insurance Pilot

Laying pipe before HFSC’s housing hearing tomorrow, Subcommittee Chairs Davidson (R-OH) and Huizenga (R-MI) along with Rep. Garbarino (R-NY) sent a letter to FHFA Director Thompson Friday sharply criticizing her for undue politicization given the President’s recent call for title-insurance reform.  Th

HFSC GOP Takes on GSE Title-Insurance Pilot

Joining attacks against the Basel end-game rules, Republican CFTC Commissioner Mersinger today criticized the proposal for its impact on derivatives markets.  It would, she said, disincentivize banks from offering client-clearing services to derivatives end-users, exacerbate the downward trend in the number of entities offering client clearing services, challenge the portability of customer positions, and increase systemic risk.

KC Fed Study: Vulnerable Crypto Users at Financial Risk

Buttressing calls for cryptoasset standards, the Kansas City Fed today published an article finding that crypto transactors are less financially literate and more risk tolerant compared to nonowners, stressing the importance of improved education regarding cryptoasset risks.  C

HFSC GOP Goes after Climate-Risk Standards

HFSC’s majority staff memo on Thursday’s hearing indicates that the panel of top federal bank supervisors …

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