Press releases and other resources for media.

14 10, 2021

American Banker, Thursday, October 14, 2021

2021-10-14T19:58:20+00:00October 14th, 2021|Press Clips|

Sidelining of Quarles complicates Fed’s policymaking

By Brendan Pedersen and Hannah Lang

WASHINGTON — With Gov. Randal Quarles no longer serving as the Federal Reserve Board’s head of bank supervision, regulatory matters have been effectively sidelined until the Biden administration fills key leadership posts at the central bank, experts say.  In addition to his role as a Fed governor, Quarles was confirmed by the Senate in 2017 to the newly created post of vice chair for supervision, but his term ended Wednesday and the administration has yet to name a successor. ….But some of the more hot-button issues could be delayed until a permanent vice chair for supervision and chair of the Fed are confirmed, said Karen Petrou, managing partner at Federal Financial Analytics. “There has been a de facto moratorium on anything controversial during the increasingly lengthy and parlous uncertainty over Powell’s renomination, and that’s not going to change until there is certainty over both the nomination and, depending on how that goes, confirmation,” said Petrou.

6 10, 2021

New York Times DealBook, Wednesday, October 6, 2021

2021-10-10T17:54:29+00:00October 6th, 2021|Press Clips|

Jerome Powell’s Future
Critics build their case against Powell

By Andrew Ross Sorkin, Jason Karaian, Sarah Kessler, Stephen Gandel, Lauren Hirsch, Ephrat Livni and Anna Schaverien

Jay Powell, the Fed chair, has been praised for how he used the central bank’s powers to steer the economy through the pandemic. His term as chair expires in February, and insiders say that he has a good chance of being reappointed. But the decision is subject to an unusually high level of uncertainty, with growing complications around his renomination, The Times’s Jeanna Smialek and Jim Tankersley report. ….Karen Petrou, co-founder of Federal Financial Analytics, said that “the fundamental constructs” of post-crisis regulation remained intact, so debates over Powell’s regulatory role were “big arguments over unremarkable changes.” Powell’s problem is that the biggest risks are now outside the traditional banking system, in fintech, cryptocurrency and other sectors outside the Fed’s authority, Petrou noted. Congress has the power to fix that, but not by sending Powell packing, she said.


6 10, 2021

Financial Times, Wednesday, October 6, 2021

2021-10-07T12:53:00+00:00October 6th, 2021|Press Clips|

Covid revealed what science can do when funding is found
By Gillian Tett

When Covid-19 hit America in the spring of 2020, Jean Bennett, a professor of biomedicine at the University of Pennsylvania, started killing her prized collection of research mice. One reason was that the lockdown partly shuttered laboratories. Another was that the battle against the virus sucked resources, money and people away from other medical problems such as blindness, which is what Bennett’s team studies. …“We call this the Valley of Death,” says Karen Petrou, a financier who wrote the Foundation Fighting Blindness report and is deeply involved in raising money for medical research, not least because she happens to be blind. The issue is that while scientists often scrape together enough public-sector cash to do initial breakthrough studies, they struggle to get money to develop them — until their concepts are proven. “That’s why you read headlines about breakthrough research, but then nothing more comes of it,” says Petrou. She wants to find a solution to the “Valley of Death” so has created a proposal for the US government to issue $30bn worth of “BioBonds” that would be sold to private investors, with the government and philanthropic organisations on the hook to take the first chunk of any losses if something goes wrong.

5 10, 2021

Voice of America, Tuesday, October 5, 2021

2021-10-08T19:12:27+00:00October 5th, 2021|Press Clips|

Colleagues’ Stock Trading Scandals Slow Fed Chief Powell’s March to Renomination
Rob Garver

With time ticking down on his term as chairman of the U.S. Federal Reserve Board, Jerome Powell’s reappointment to the post looks less certain than it did just a few weeks ago, as left-leaning Democrats hammer away at a series of scandals involving senior Fed personnel.  On Monday, Powell’s chief antagonist in Congress, Senator Elizabeth Warren, released a letter to the head of the Securities and Exchange Commission asking the agency to investigate “ethically questionable” securities transactions by the presidents of two of the Federal Reserve’s district banks, and the Fed Board’s vice chairman….In a note to clients last week, Karen Petrou, managing partner of Federal Financial Analytics, wrote, “One of Mr. Powell’s strengths in the renomination battle has been divisions among Democratic progressives, making this resonant scandal particularly costly to his otherwise-strong position within the Biden Administration.”

3 10, 2021

Financial Times, Sunday, October 3, 2021

2021-10-06T12:53:30+00:00October 3rd, 2021|Press Clips|

The left’s low-rate fantasy makes inequality worse
Easy money is not creating better jobs, it’s feeding market bubbles that make the asset-rich richer

By Rana Foroohar

Unlike many on America’s left, I’ve always been sceptical that ultra-low interest rates make things easier for the poor. Keeping rates too low for too long encourages speculation and debt bubbles. …And despite a bit of wage growth over the past six months, incomes on an inflation-adjusted basis are still below where they were in 2019, says Karen Petrou, managing partner of Federal Financial Analytics. “This is the Kool-Aid: that ultra-low rates promote employment,” she says. “But they don’t.” Most people work to make money, and while central bankers can brew up asset inflation, they can’t create good middle-class jobs. Only business, helped along by the right policy incentives, can do that.

29 09, 2021

American Banker, Wednesday, September 29, 2021

2021-09-30T20:10:40+00:00September 29th, 2021|Press Clips|

OCC nominee faces rocky path to Senate confirmation

By Brendan Pedersen

It took the Biden administration nine months to settle on a nominee to run the Office of the Comptroller of the Currency, passing over other candidates along the way. The process to get Saule Omarova approved by the Senate does not appear it will be any easier. To say that Omarova’s nomination has stoked controversy is putting it lightly. Industry trade groups have all voiced public concerns about her views as an academic, suggesting some moderate Democrats may vote against the confirmation….Some analysts suggest Omarova’s nomination — seen by some as a dramatic win for progressives such as Sen. Elizabeth Warren, D-Mass., and Senate Banking Committee Chair Sherrod Brown, D-Ohio — may be an attempt to persuade liberals not to fight a potential reappointment of Fed Chair Jerome Powell. “Professor Omarova is more than progressive and lacks the agency and industry credentials that strengthen other controversial appointees such as Gary Gensler and Rohit Chopra,” said Karen Petrou, managing partner of Federal Financial Analytics, in a research note this week. “This résumé gap makes confirmation still more questionable, but I doubt confirmation was the point here.”

28 09, 2021

Bloomberg, Tuesday, September 28, 2021

2021-09-28T16:52:28+00:00September 28th, 2021|Press Clips|

Crypto’s Road Gets Even Harder With Biden Pick for Bank Watchdog
By Jesse Hamilton and Akayla Gardner

President Joe Biden may have just dashed any remaining hopes that Washington would warm to cryptocurrencies under his watch.The White House nominated Saule Omarova last week to lead the Office of the Comptroller of the Currency, all but confirming that U.S. financial regulators will be void of any crypto allies for at least the next three years….The crackdown is global, with China last week announcing a more restrictive ban on crypto transactions and mining. Karen Shaw Petrou, a managing partner at Washington research firm Federal Financial Analytics, said the darkening clouds showed market participants missed an opportunity to find common ground with regulators — and now it may be too late. Crypto “conveniently believed that spouting often dubious inclusion and innovation propositions would forestall regulation,” she said. The sector “was extraordinarily intoxicated with the cool factor.”

15 09, 2021

Congressional Black Caucus Foundation, Wednesday, September 15, 2021

2021-10-13T17:59:41+00:00September 15th, 2021|Press Clips|

Global Inequality & Central Bankers: The Role of Monetary Authorities in Economic Equity

Hosted by Renita Young

Some have questioned whether central bankers – like the United States Federal Reserve – should get in the business of combatting economic inequity, and associated problems like the racial wealth gap and environmental injustice. Others have argued that central bankers not only have the authority to promote economic equity but that they should become more active in doing so. This remains a global debate. Join Rep. Gregory W. Meeks, Chairman of the House Foreign Affairs Committee, and central bankers from around the world as they consider how best to promote economic fairness and financial inclusion. Great discussion with William E Spriggs, Chris Brummer, Karen Petrou, and Renita D. Young on global inequality, central bankers, and the role monetary authorities should play in ensuring economic equity. Every year, Rep. Gregory Meeks examines progress we’ve made in closing the wealth gap – this year he took it global!

15 09, 2021

Mises Institute, Wednesday, September 15, 2021

2021-09-16T17:20:27+00:00September 15th, 2021|Press Clips, Uncategorized|

The Fed Is Bailing Out the Wealthy as Everyone Else Pays the Price
By Ryan McMaken

The Federal reserve says that inequality is a problem. At the same, the Fed also pretends to have nothing to do with it.
Last September, for instance, Jerome Powell bemoaned the “relative stagnation of income” for people with lower incomes in the United States, but then claimed the Fed “doesn’t have the tools” to address this issue. Instead, Powell, being the chairman of this ostensibly “independent” and “nonpolitical” central bank, called for the federal government to engage in fiscal policy efforts at income redistribution….In her new book, Engine of Inequality: The Fed and the Future of Wealth in America, Karen Petrou looks in detail at how Fed policy over the past decade—especially quantitative easing (QE) and ultralow interest rates—have benefited the wealthy while leaving most ordinary people behind. Petrou is one of the more interesting and informative analysts examining the financial services sector. As the head of Federal Financial Analytics Inc., she has provided research on the banking sector for more than thirty years, but in recent years she’s become more focused on exposing and examining the unhealthy and destructive effects of Fed policyPetrou takes a different approach from the Austrians. She appears to have arrived at her conclusions from observing the trends and outcomes produced by Fed policy and then working backward into a theoretical framework. The data seems to have prompted her to ask why things have gone …

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