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

American Banker, Wednesday, June 15, 2022

Did bank regulators just get a green light for climate stress tests? By  Kyle Campbell Internationally active banks could soon be required to conduct internal scenario analyses and undergo stress tests related to climate change. Both measures were called for as part of the Basel Committee on Banking Supervision’s newly finalized guidelines for climate-change supervision and management, which were released Wednesday...With the Basel structure in place, the FDIC and the OCC likely will crystallize their standards and the Federal Reserve Board could move swiftly to adopt them as well, said Karen Petrou, managing partner at Federal Financial Analytics.  Fed officials will “quickly sign on to the OCC-FDIC standards, and all of the agencies will sit down in the very near future to come up with an interagency set of high-level principles and issue those before the end of the summer,” Petrou said....Petrou said she anticipates climate supervision and the implementation [...]

June 15th, 2022|Categories: Press Clips|

Barron’s, Saturday, June 4, 2022

The Fed’s Anything-We-Can-Think-Of Monetary Policy Isn’t Working By Karen Petrou The day Jerome Powell won his second term as Federal Reserve chair, he said he couldn’t promise a soft landing and hadn’t meant to commit his fellow policy makers only to fifty basis-point hikes. He has also walked away from his insistence that inflation is transitory and the economy is “robust.” We’ve gone from whatever-it-takes monetary policy to anything we can think of. One major reason for this muddle is that the Fed’s models and objectives depend on anachronistic assumptions that America has a vibrant middle class. Once we did; now we don’t. With a deep middle class, policy transmits effectively through the economy; without one, it can’t. We urgently need a new approach to central banking that takes inequality fully into account and thus protects sustained, shared prosperity.

June 4th, 2022|Categories: Press Clips|

American Banker, Wednesday, June 1, 2022

Politics at play behind Biden's Fed blessing Kyle Campbell In their first policy meeting in nearly a year, Joe Biden gave Jerome Powell something no other president has given to a Federal Reserve chairman: his blessing to raise interest rates. Biden, in brief remarks given Tuesday afternoon in the Oval Office, said he would respect the Fed’s independence as it took steps to cool down inflation, which has been running at a four-decade high...Karen Petrou, managing partner at Federal Financial Analytics, said the high-profile meeting was a way to “separate the administration from the Fed when it comes to fighting inflation.” It could also be a way for the president to hedge his bets, she added. “If inflation meaningfully abates, then the White House can take credit and politely recognize the Fed,” Petrou said. “If inflation stays about the same or worsens, then the emphatic emphasis  on independence sets up [...]

June 1st, 2022|Categories: Press Clips|

The Hill, Wednesday, June 1, 2022

Biden hedges inflation backlash with focus on Fed By Sylvan Lane President Biden’s relationship with the Federal Reserve has come under the spotlight as the White House touts the central bank’s leadership of the fight against inflation. Biden met with Fed Chair Jerome Powell at the White House on Tuesday as the administration touts its efforts to curb rising prices. The meeting came one day after the White House laid out a plan for fighting inflation focused on allowing the Fed to act without interference from the administration...."While it is intuitively true that the Fed is independent and the president cannot tell it what to do, he is the lead figure for the economy to whom most Americans look,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics. She cited former President Carter losing his 1980 reelection bid to Reagan despite his appointment of Volcker, whose attempts to curb [...]

June 1st, 2022|Categories: Press Clips|

American Banker, Bankshot Podcast, Wednesday, May 18, 2022

Should banks be more worried about World War III or Cold War II? By John Heltman Below is a lightly edited transcript of the podcast: JOHN HELTMAN: I'm doing a podcast about Russia and Ukraine. And I know that you have feelings about Russia and Ukraine, right?... KAREN PETROU: I think there's no, no question in my mind that global finance is fragmented …HELTMAN: That’s Karen Petrou, managing partner at Federal Financial Analytics. PETROU: … along with global trade, and the increasingly tenuous institutions, like the World Trade Organization, are they relatively toothless, but hopeful institutions like the Financial Stability Board, these are going to be crumpling back into blocs — spelled B-L-O-C. With, as you pointed out, back to what I remember until the late 90s, you know, the US and its allies, Russia and its allies, and the non-aligned nations, China, India and some pretty significant emerging markets, [...]

May 18th, 2022|Categories: Press Clips|

American Banker Bankshot Podcast: Thursday, May 5, 2022

By John Heltman Decentralized finance, or DeFi, could revolutionize the way money works, how it is controlled and how its power is distributed. But is DeFi the future or hype? Click the link below to listen to Heltman's conversation with Karen Petrou.

May 5th, 2022|Categories: Press Clips|

The Hill, Tuesday, May 3, 2022

Fed expected to hike interest rates Wednesday By Sylvan Lane The Federal Reserve is racing to get inflation under control and pull back stimulus for an overheated economy with a double dose of rate hikes expected on Wednesday. The Fed’s monetary policy panel is expected to announce a 0.5 percentage point rate hike Wednesday, twice the size of a typical interest rate increase, as the bank rushes to get in front of rising prices....“What you try to do when you slow growth is reduce demand and that drops prices. How much it can drop prices when you already have abnormal supply shortages has never been tested before,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics. “The Fed can maybe make some difference, but the more of a difference it makes in demand, the more painful the recessionary risk becomes. That’s why this is so hard.”  Petrou is among [...]

May 3rd, 2022|Categories: Press Clips|

American Banker, Tuesday, April 26, 2022

Toomey's quest to end Fed 'mission creep' could have legs By Kyle Campbell Sen. Pat Toomey, R-Pa., wants to reform the Federal Reserve Banks if it’s the last thing he does as an elected official. And he very well may succeed. The ranking member on the Senate Banking Committee, who will not seek re-election this fall, has made it a priority for his final months in office to rein in what he describes as “mission creep” within the Fed’s 12 regional banks....The clearest example of this is the location of the 12 regional banks, which reflect the population centers of a century ago, Karen Petrou, co-founder and managing partner of Federal Financial Analytics, said. There are two reserve banks in Missouri and only one west of the Rocky Mountains. With so many of the reserve banks’ original duties able to be carried out digitally, Petrou said the best justification for [...]

April 26th, 2022|Categories: Press Clips|

American Banker Magazine, April 2022

Book Review: The Lords of Easy Money By Karen Petrou In “The Lords of Easy Money,” the journalist Christopher Leonard takes a critical eye to the Federal Reserve’s actions following the 2008 financial crisis, in particular, how the policy of quantitative easing has worsened economic inequality in the U.S. (pg 39)

April 21st, 2022|Categories: Press Clips|

MarketWatch, Tuesday, April 19, 2022

Commodity prices are going haywire, prompting fears of the next financial crisis By Chris Matthews The prices of commodities including oil CL00, -5.00%, wheat W00, -2.04% and palladium PA00, -2.56% have surged this year as much of the global economy shakes off COVID restrictions and as Russia’s invasion of Ukraine has led to a key commodity-exporting region to be cut off from the the rest of the world. This volatility has not only helped fuel levels of inflation not seen in 40 years —market observers are warning that it could put the stability of the global economy at risk unless regulators and central banks wake up to the threats posed.“One after another development related to Ukraine is exposing the long standing flaws in the increasingly obsolete post-Second World War framework” of global trade and financial regulation, Karen Petrou, managing partner of the financial-policy think tank Federal Financial Analytics, told MarketWatch. [...]

April 19th, 2022|Categories: Press Clips|
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