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

American Banker, Monday, September 12, 2022

Progressives 'cautiously optimistic' as Barr agenda comes into focus By Kyle Campbell Changes are coming to the Federal Reserve's regulatory and supervision policy, just not the type of sweeping reform some had advocated and others had feared. Last week, Michael Barr gave his first speech since being sworn in as the Fed's new vice chair for supervision in July. He outlined a different set of priorities from his predecessor, Randal Quarles, but did not deliver the full scale rebuke called for by certain progressive groups at the onset of the Biden administration...Karen Petrou, co-founder and managing partner of Federal Financial Analytics, said she was encouraged by the additional detail Barr provided about his vision for a holistic capital review. He mentioned the concept briefly during his confirmation hearing in front of the Senate Banking Committee earlier this summer. Petrou said last week's remarks demonstrated Barr's initial statement was not an [...]

September 12th, 2022|Categories: Press Clips|

American Banker, Monday, August 29, 2022

As Fed goes full steam ahead on higher interest rates, banks brace for new normal By  Kyle Campbell The Federal Reserve's target federal funds rate is as high as it has been in a decade and is unlikely to go any lower in the foreseeable future, Chair Jerome Powell said Friday. But just how this new reality will affect banks individually depends in large part on what's in their loan books. During a speech at the Federal Reserve Bank of Kansas City's economic symposium in Jackson Hole, Wyoming, Powell said he expects the rate to be just under 4% by the end of next year...Karen Petrou, managing partner at Federal Financial Analytics, said most banks are keenly aware of this risk and have taken measures to mitigate it, chiefly by diversifying their mix of funding sources. But as rates continue to rise, further adjustments will likely become necessary, she said, [...]

August 29th, 2022|Categories: Press Clips|

The Hill, Sunday, August 28, 2022

Black Americans feel disproportionate pain from high interest rates by Cheyanne M. Daniels and Sylvan Lane The federal government’s efforts to stanch inflation are disproportionately impacting Black Americans. The Federal Reserve has hiked interest rates in the hopes of cooling off a red-hot economy, but its actions are hitting Black Americans — who have historically been squeezed out of home ownership and affordable loans — the hardest....“The Fed through that period argued that ultra-low interest rates supported household wealth by virtue of allowing people with homes to reduce their cost of housing with refinancing and therefore improve their wealth position. But that turned out not to be anywhere near as true for low and moderate income people, particularly minorities,” said Karen Shaw Petrou, author of “Engine of Inequality: The Fed and the Future of Wealth in America.” “We’ve now had 22 years … of policies that make it harder for [...]

August 28th, 2022|Categories: Press Clips|

MarketWatch, Tuesday, August 23, 2022

Regulators worry that hedge funds could spark the next financial crisis By Chris Matthews In the wake of the 2008 financial crisis, regulators have kept close tabs on America’s largest banks, subjecting them to regular stress testing and imposing new rules meant to ensure their safety during periods of financial turmoil. These new rules may have made the banking system safer, experts say, but they have also fueled the growth of a shadow financial system that is providing a growing share of financing for U.S. companies and taking on new, difficult-to-measure risks in the process...Karen Petrou, co-founder of the banking advisory firm Federal Financial Analytics, Inc., said in an interview that the steady march toward greater surveillance of private funds is the inevitable outgrowth of regulations aimed at ensuring financial stability. With the major banks KBE, -0.32% facing restrictions on leverage, capital will move to less regulated areas “like water [...]

August 23rd, 2022|Categories: Press Clips|

Bloomberg Law, Friday, July 29, 2022

Bloomberg Law: Unlocking Consumer Bank Data Stokes Chopra's 'Underworld' Fears Evan Weinberger and Andrea Vittorio Consumers who let budgeting apps or payment platforms access their banking data shouldn’t feel as “powerless” about how that information is used if a pending regulation works as planned, said the head of the Consumer Financial Protection Bureau....Making data more portable, as an open banking system would, ensures that a single firm can’t hold a monopoly over it, says the Information Technology and Innovation Foundation.“The point of data portability is making sure there’s not exclusive access to data,” agreed Daniel Castro, vice president of the foundation and director of the Center for Data Innovation. But there are significant risks that CFPB needs to guard against, said Karen Shaw Petrou, managing partner of Federal Financial Analytics. And they’ve grown more ominous since the idea of open banking was proposed as part of the post-financial crisis Dodd-Frank [...]

July 29th, 2022|Categories: Press Clips|

Financial Times, Friday, July 29, 2022

Biomedical financing must not be a casualty of the current downturn By Karen Petrou If the funding of small companies is threatened, then vital and transformative research will stop The writer is Managing Partner of Federal Financial Analytics Each day seems to bring more bad news about US financial-market valuations, with the only cheer to be found in stories speculating that things have got so bad that we’re at “capitulation” or rock bottom. However, there’s one market many of us don’t consider that is struggling: private financing for early-stage biomedical treatments and cures. We should be concerned about the money that’s vanished from a sector essential to easing pain, prolonging life and helping millions to better see, hear, move and even think. Quickly restoring private capital funding for early-stage biomedical research isn’t just about rescuing investors — it can and will save lives. Biomedical finance’s travails are the result of [...]

July 29th, 2022|Categories: Press Clips|

The Hill, Wednesday, July 27, 2022

‘No good answer’: Fed set for big rate hike despite recession fears by Sylvan Lane The Federal Reserve is on track for another steep interest rate hike Wednesday despite growing fears its fight against inflation could push the U.S. into a recession. Fed officials are expected to announce another 0.75 percentage point interest rate hike Wednesday as both job growth and price growth rose, according to federal data. The Fed has aggressively boosted interest rates since March to bring prices down after waiting in vain for months for inflation to decline. The bank has already hiked its baseline interest rate range by 1.5 percentage points this year, including a 0.75 percentage point hike in June...Karen Shaw Petrou, managing partner at Federal Financial Analytics, said the pressures facing the Fed “have only gotten” worse since the bank raised rates in June, forcing the Fed to make tough choices. “You got no meaningful curb on [...]

July 27th, 2022|Categories: Press Clips|

American Banker, Tuesday, July 26, 2022

New study says the Fed needs to talk the talk By  Kyle Campbell When central banks communicate with the general public, it enhances trust and anchors inflation expectations, a recent study from the National Bureau of Economic Research finds. As the Federal Reserve attempts to tamp down inflation from a 40-year-high, these findings should serve as a wake-up call, said former Fed Vice Chair Alan Blinder, one of the co-authors of the paper....Karen Petrou, co-founder and managing partner of Federal Financial Analytics, said financial markets are already so transfixed with the Fed’s actions and move in such lockstep with them that it is difficult for the Fed to get an accurate read of the economic landscape. While she is skeptical that average citizens would ever become so focused on the Fed, Petrou said she would be concerned about the central bank gaining any more influence than it already has.“Traders are now moving [...]

July 26th, 2022|Categories: Press Clips|

American Banker, Wednesday, July 6, 2022

Rethinking bank capital at a 'pivotal moment' for the Fed By Kyle Campbell Michael Barr, the Biden administration’s pick to serve as the Federal Reserve’s top regulator, said during his Senate confirmation hearing that he wants to rethink the Fed’s various capital requirements “as a whole, rather than piece by piece.” Barr, who is expected to clear a Senate floor vote this summer to become the Fed’s next vice chair for supervision, struck a chord with that sentiment, particularly with Karen Petrou, managing partner at Federal Financial Analytics. “After Michael said that, I thought this was just too important an idea at a moment that really could be pivotal,” Petrou said. “We need to bring attention to it and then try to help move it along, because if the U.S. just goes back to a rule-by-rule, piece-by-piece, bits-and-pieces capital regulation, we'll never get a coherent system without counterproductive impact.”...

July 6th, 2022|Categories: Press Clips|

Marketplace, Thursday, June 23, 2022

Here’s why the CFPB is concerned about credit card late fees By Justin Ho The Consumer Financial Protection Bureau announced this week that it’s looking into the fees that credit card companies charge consumers for late payments — specifically, whether those late fees are “reasonable and proportional” to the amount people owe. The CFPB is looking at this now because credit card companies can change their late fees based on inflation, and given how high inflation has been lately, they have some concerns. The current rules governing credit card late fees date back to 2009. In the wake of the financial crisis, Congress was looking for ways to protect people from getting too deep into debt, said Karen Petrou at Federal Financial Analytics. “Credit cards became an area where consumer advocates were really focused,” she said. In 2010, the Federal Reserve put a $25 limit on late fees. But it [...]

June 24th, 2022|Categories: Press Clips|
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