For copies of press clips listed below, please contact Federal Financial Analytics at info@fedfin.com. Please include the date and title of the requested item(s).

4 04, 2022

American Banker, Monday, April 4, 2022

2022-04-05T16:03:13-04:00April 4th, 2022|Press Clips|

Federal Home Loan banks’ purpose called into question as advances drop

As banks rack up record levels of deposits, the Federal Home Loan banks’ core business of providing liquidity to member institutions is drying up, leading some critics to question the institutions’ long-term viability. The lifeblood of the Home Loan banks — advances to banks, credit unions and insurance companies — plummeted 20% last year to $350 billion, its lowest level in 15 years. The Home Loan banks say the decline is part of the normal ebb and flow of the market….“The Home Loan banks are very important institutions and they really warrant modern-day scrutiny,” said Karen Petrou, co-founder and managing partner of Federal Financial Analytics. They’ve always flown under the radar because Fannie and Freddie are huge and take up a lot of bandwidth.”

https://www.americanbanker.com/news/federal-home-loan-banks-face-criticism-calls-for-independent-advisory-committee

 

29 03, 2022

Bloomberg, Tuesday, March 29, 2022

2022-04-04T20:19:32-04:00March 29th, 2022|Press Clips|

Financial Sanctions Call for a New Bretton Woods Framework

By Karen Petrou

After World War I, the great powers decided on reparations to punish an aggressor for its carnage. After World War II, the great powers turned instead to reconciliation, creating the Bretton Woods Agreement to entice aggressors into good statecraft to gain access to a rules-based global financial order. Now, the great powers are reasserting themselves with a new kind of reparations: sanctions and even expropriations. We shall see if aggressors are dissuaded from still worse, but the post-1945 global-financial-policy construct is doomed. Given the vital importance of stable finance, it’s not too soon to think about what must come next to prevent 2022’s reparations from ending as disastrously as a century ago….

https://www.bloomberg.com/opinion/articles/2022-03-29/financial-sanctions-call-for-a-new-bretton-woods-construct?sref=BSO3yKhf

13 03, 2022

American Banker, Sunday, March 13, 2022

2022-03-15T19:37:08-04:00March 13th, 2022|Press Clips|

What’s next after Biden’s crypto order
By Claire Williams, Kyle Campbell

President Biden’s long-awaited executive order on cryptocurrency was met with cautious optimism from much of the finance industry, but with so many important details unresolved, it’s far from certain what the policy outcome of the order will ultimately be….“The president has no authority to order the Fed to do anything, but what he can do and what he has done is tell the central bank that the White House believes that a CDBC may well be vital,” Karen Petrou, managing partner of data firm Federal Financial Analytics, said. “This is a request the Fed cannot ignore.”

https://www.americanbanker.com/list/what-bidens-crypto-order-means-for-banks

28 02, 2022

Marketplace, Monday, February 28, 2022

2022-03-03T13:33:12-05:00February 28th, 2022|Press Clips|

How sanctions will prevent Russia from using its $600 billion-plus rainy day fund to prop up the ruble

By Mitchell Hartman

The combination of the Ukraine war itself and the international sanctions it triggered caused the ruble to tank Monday morning. The Russian currency started the trading day by losing a quarter of its value. ​Russia’s central bank had a plan in place to prop up the ruble in case of emergency — a rainy day fund worth more than $600 billion, comprising assets parked in banks and institutions all over the world….“The point of these sanctions is to make it impossible for Russia to use its reserves,” said Karen Petrou, at Federal Financial Analytics. She pointed out that U.S. and European authorities are freezing, not seizing, Russia’s foreign exchange reserves. “It doesn’t take anything from Russia. Russia still has its reserves, but it can’t use them. They’re useless, they’re meaningless, they’re no longer a resource for a stable Russian system and the war on Ukraine,” she said…

https://www.marketplace.org/2022/02/28/how-sanctions-will-prevent-russia-from-using-its-600-billion-plus-rainy-day-fund-to-prop-up-the-ruble/

16 02, 2022

Coindesk, Wednesday, February 16, 2022

2022-02-18T16:44:41-05:00February 16th, 2022|Press Clips|

Irrelevance of January Fed Minutes Shows How Fast Monetary Policy Is Moving

Helene Braun

With minutes from the U.S. Federal Reserve’s January meeting due out Wednesday, crypto traders might be forgiven for dismissing them entirely. Look how drastically the environment has changed in the past month: The January jobs report showed a much hotter labor market than expected by economists, explaining partly why last week’s Consumer Price Index report came in at a shocking 7.5%, larger than analysts predicted and the fastest pace in four decades. …Bullard’s statement crushed both stock and crypto markets, based on concerns that a more aggressive Fed could send prices for risky assets into a tailspin….“If the Fed surprises markets, the pace of this risk-off move will accelerate, perhaps dramatically,” said Federal Financial Analytics’ managing partner Karen Petrou. “Cryptocurrency will suffer like all ‘risk-off’ market sectors in this scenario, but perhaps suffer worse because its volatility is so much greater.”

https://www.coindesk.com/markets/2022/02/16/irrelevance-of-january-fed-minutes-shows-how-fast-monetary-policy-is-moving/

3 02, 2022

NBC News, Thursday, February 3, 2022

2022-02-09T16:11:21-05:00February 3rd, 2022|Press Clips|

Biden Fed picks face GOP skepticism in Senate hearing

By Martha C. White

Lawmakers sparred with one another and President Joe Biden’s Federal Reserve nominees in a sometimes contentious Senate Banking Committee hearing Thursday morning. Biden has an unusual chance to nominate three members to the central bank’s policymaking Board of Governors as the result of an unfilled vacancy during Donald Trump’s presidency. Biden has said he wants to increase diversity at the Fed, and his trio of nominees includes two women and two Black nominees….Raskin said her viewpoint on the role of banking regulations and climate policy was taken out of context, and she labored to draw a distinction between emergency pandemic capital funding and everyday banking regulation. Karen Shaw Petrou, the managing partner of the consulting firm Federal Financial Analytics, said, “She is going to need every Democrat.” While Raskin has been confirmed to previous government roles on a bipartisan basis, Petrou said, the stakes are higher this time around. “In those positions, she was less important, and you didn’t have the third rail of climate change with the kind of constituent and ideological interests that were in evidence today,” she said.

https://www.nbcnews.com/business/economy/biden-fed-picks-face-gop-skepticism-senate-hearing-rcna14742

27 01, 2022

Financial Times, Thursday, January 27, 2022

2022-01-27T20:17:10-05:00January 27th, 2022|Press Clips|

Investors: beware liquidity holes

By Gillian Tett

In the past decade, the phrase “liquidity trap” has often been tossed around in western markets. For central banks have provided so much funding for the financial system, via quantitative easing, that it seems that the glut was becoming ineffective. This week, however, investors would be wise to ponder another concept: a “liquidity hole” — or, perhaps more accurately, holes….From a long-term perspective, this is a healthy development, given that a decade of ultra-loose policy has pumped asset prices to crazily high levels, relative to real economic growth. Indeed, I would argue that the Fed should have started tightening some time ago. But desirable or not, nobody should ignore how risky this shift is — and how hard it is to model the market implications. Nobody knows what will happens when a central bank tries to simultaneously raise rates and shrink its balance sheet, since it has never been done on this scale before. Nor do we know how tightening will play out in a world where so much credit intermediation is now moving through markets (not banks, as before) — and where wealth inequality, partly due to high asset prices, is potentially “blocking monetary policy transmission”, as Karen Petrou, a financier, argues. We are in uncharted territory. No wonder that Powell admitted this week that “I don’t think it is possible to say exactly how this [tightening] is going to go”. If anything, that is an understatement. Investors should take note …

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