Press Clips

Press Clips2021-05-24T20:16:05-04:00

Barron’s, Sunday, March 17, 2024

The U.S. Economy Is Booming, But Only for a Few By Karen Petrou “Our economy is literally the envy of the world,” President Biden declared in his recent State of the Union address. There’s some truth to this exceptionalism talk. However, the U.S. economy seems to be doing better than other advanced economies thanks also to data badly distorted by U.S. economic inequality. Here, we’re also exceptional, just in the bad way of being less equal than all other advanced democracies. Big-picture numbers show the U.S. economy beating much of the rest of the world. Gross domestic product grew 2.5% in 2023, compared to 1.9% in Japan, 0.5% in the U.K., and negative 0.3%—a mild recession—in Germany. Unemployment numbers are similar. What these apparently favorable comparisons miss, however, is how spending and investing by the few Americans who own so much of American wealth and receive so much of its income [...]

March 17th, 2024|Categories: Press Clips|

American Banker, Wednesday, March 13, 2024

Banks knock FDIC over growing tab for last year's failures By Polo Rocha One year after Silicon Valley Bank and Signature Bank failed in the span of three days, big banks are miffed about their growing tab from last March's wild weekend. The gripes stem from decisions made between March 10-12, 2023, when the Federal Deposit Insurance Corp. stopped deposit runs by taking over the two banks and declaring a systemic risk exception to ensure that the vast quantities of uninsured deposits at those failed banks were covered....Karen Petrou, the co-founder of the consulting firm Federal Financial Analytics, said the $4 billion difference is a "very significant mistake" that calls into question the FDIC's credibility in gauging the costliness of bank resolutions. "When an agency gets something this wrong, it's not unreasonable for those picking up the tab to ask," Petrou said. The agency has been gradually getting rid of [...]

March 13th, 2024|Categories: Press Clips|

Marketplace, Wednesday, March 6, 2024

How November's election could shape antitrust policy by David Brancaccio It’s the morning after Super Tuesday primaries, and for people making money decisions large and small, the election results are not a paradigm shift. We’ll discuss why with Karen Petrou, managing partner at Federal Financial Analytics. https://www.marketplace.org/shows/marketplace-morning-report/this-elections-big-trust-issue-maybe-not-the-one-youre-thinking-of/

March 6th, 2024|Categories: Press Clips|

Politico Morning Money, Thursday, February 8, 2024

The latest on NYCB By Zachary Warmbrodt .... MM has a first look at the political and policy impacts to watch from Federal Financial Analytics. A few highlights: The bank reported deposit inflows but what they are and how long they last is uncertain. A big factor: The government will likely be hard-pressed to do anything resembling a bailout or a systemic designation. Details about NYCB's reliance on Federal Home Loan Banks will be key. The FHFA – the agency overseeing the FHLBs — is taking a sterner view of troubled bank advances than it once did. GOP lawmakers may focus on the FDIC’s decision to sell Signature Bank’s assets to NYCB, given it had yet to integrate Flagstar Bank and already had significant concentrations in New York-area commercial real estate. It could feed into Republicans’ push to force out FDIC Chair Martin Gruenberg. https://www.politico.com/newsletters/morning-money

February 8th, 2024|Categories: Press Clips|

Barron’s, Wednesday, January 31, 2024

There’s a Silver Lining for the Middle Class in High Interest Rates By Matt Peterson Americans are starting to feel better about the economy, but it might be a while before they release their anger at the Federal Reserve and Chairman Jay Powell. His approval rating has fallen even farther than President Joe Biden’s, according to Gallup. The Fed is seen as presiding over a period of inflationary agony. Its interest-rate increases were intended to slow price gains across the economy, but in the process they’ve made important aspects of American life more expensive. Sen. Elizabeth Warren (D., Mass.) and other Democrats urged Powell to cut rates this week, citing the high cost of mortgages, among other issues.... Banking analyst Karen Petrou’s 2021 book, Engine of Inequality: The Fed and the Future of Wealth in America, described the Fed in unflattering terms. The prolonged period of low rates helped boost stock [...]

January 31st, 2024|Categories: Press Clips|

Politico, Morning Money, Tuesday, January 30, 2024

By Zachary Warmbrodt Karen Petrou, managing partner of Federal Financial Analytics, said the new policy will provide at least some certainty for national banks but that almost no deals of size will get done without the Federal Reserve and the Justice Department. The Fed and DOJ have been promising a new bank merger review policy but “it’s still nowhere to be seen.” https://www.politico.com/newsletters/morning-money/2024/01/30/a-bank-merger-mirage-00138491

January 30th, 2024|Categories: Press Clips|

Politico Morning Money, Wednesday, January 17, 2024

The industry says the proposal is total overkill and needs to be both recalibrated and reduced. They, and Waller, also say that operational losses aren’t usually correlated with, say, credit risk events, so there’s not really a need to have another capital buffer for it. “The charge for operational risk is extraordinary,” Bank Policy Institute CEO Greg Baer told reporters Tuesday. “It's almost double the worst year of operational losses in history … and it assumes counterfactually and counterintuitively that op risk losses are perfectly correlated with market risk and credit risk losses, and therefore that you need to cover the worst case of all three simultaneously and capitalize for it.” Karen Petrou, managing partner of Federal Financial Analytics, argues that banks’ money is better spent in other ways. “What matters in terms of op risk in a cyber attack or a natural diaster, it’s not how much capital you [...]

January 17th, 2024|Categories: Press Clips|

Financial Times, Friday, January 12, 2024

The Fed decision markets need to pay more attention to Central bank set to make a decision on whether to extend its latest emergency liquidity facility By Karen Petrou The writer is managing partner of Federal Financial Analytics One big market event for early 2024 will come when the US Federal Reserve makes a decision on whether to close its latest emergency liquidity facility on March 11 as a senior Fed official recently signalled it was likely to do so. Called the Bank Term Funding Program, the facility’s name conveys the usual blandness with which the Fed likes to brand the trillions it throws into the financial system. But the BTFP is anything but dull. Without it, all but the biggest US banks could find it even tougher to raise profitability this year; with it, they’ll find it still harder to lend into what the Fed, President Joe Biden, and [...]

January 12th, 2024|Categories: Press Clips|

Marketplace Morning Report, Tuesday, January 9, 2024

“More people are carrying more debt for longer” We'll parse through some of the latest data on consumer debt and hear who's getting hit the hardest. by Nancy Marshall-Genzer Investors are looking ahead to Thursday, when we’ll get the December consumer price index. We’ll discuss what we could expect with Karen Petrou, co-founder and managing partner at Federal Financial Analytics. https://www.marketplace.org/shows/marketplace-morning-report/more-people-are-carrying-more-debt-for-longer/

January 9th, 2024|Categories: Press Clips|

American Banker, Wednesday, December 20, 2023

Fed's rosier outlook could mean end of emergency lending facility By Kyle Campbell Recent forecasts from the Federal Reserve projecting greater stability in 2024 could spell the end for an increasingly popular funding facility at the central bank...Karen Petrou, managing partner at Federal Financial Analytics, said removing the facility could have consequences..."As with all its emergency fixes, the Fed is in a mighty pickle if it closes the BTFP," Petrou said. "Banks continue to sit on large unrealized losses and love this security blanket."  Petrou noted that the program provides cheaper funding than the Fed's official last resort lending facility, the discount window, as well as other funding sources, such as the Federal Home Loan Banks and the private repurchase agreement market. As commercial deposits continue to trend down — having fallen by $900 billion since their peak in April 2022 — Petrou said banks want as many alternative funding options as possible. But, she noted, this [...]

December 20th, 2023|Categories: Press Clips|
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