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

American Banker, BankThink, Wednesday, November 17, 2021

Fireworks over OCC nominee distract from bigger policy issue By Karen Petrou Tomorrow, the Senate Banking Committee will hold Saule Omarova's confirmation hearing for comptroller of the currency. Many expect this to be a knock-down, drag-out between the progressive bank-reform agenda and the banking industry's antipathy thereto. This it surely will be, but to watch only these fireworks is to miss the longer-burning fire below: renewed questions about whether banks are public utilities or private companies with unique privileges fully reimbursed by virtue of unduly burdensome regulation. It is by this choice — not Ms. Omarova's most-uncertain confirmation — that the future of U.S. finance will be decided.

November 17th, 2021|Categories: Press Clips|

New York Times, DealBook, Tuesday, November 9. 2021

A resignation could reshape the Fed Randal Quarles, a former Wall Street lawyer appointed to the Federal Reserve Board by President Donald Trump, is leaving the central bank. Quarles, who spent four years as head of bank supervision, announced yesterday that he will depart in December. His open seat will allow the Biden administration to reshape the central bank’s leadership. Here’s what some Fed watchers think will happen next: There will likely be more regulation of the financial sector, broadly defined. Quarles watered down some regulations enacted after the financial crisis, drawing criticism from Senator Elizabeth Warren and some other Democrats, who want tighter oversight of banks. Karen Petrou, a consultant and banking regulation expert, said the next head of supervision would likely take a closer look at Bitcoin and other nontraditional areas of finance.  

November 9th, 2021|Categories: Press Clips|

NPR, On Point, Monday, November 1, 2021

Why the Federal Reserve is an 'engine of inequality'  Hosted by Meghan Chakrabartti We often talk about what's causing economic inequality — stagnant working class income, the way the U.S. taxes wealth v. wages, the high cost of living. But banking insider Karen Petrou says there's a powerful driver of inequality that's avoided real scrutiny: the Federal Reserve. "The Fed is the only entity I know of that could, under current law, make a meaningful difference," she says. Today, On Point: Interest rates, inflation, employment. That's where the Fed formally flexes its power. That's also why Petrou says it's an 'engine of inequality.' Could that change?

November 1st, 2021|Categories: Press Clips|

American Banker, Thursday, October 14, 2021

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 [...]

October 14th, 2021|Categories: Press Clips|

New York Times DealBook, Wednesday, October 6, 2021

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 [...]

October 6th, 2021|Categories: Press Clips|

Financial Times, Wednesday, October 6, 2021

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 [...]

October 6th, 2021|Categories: Press Clips|

Voice of America, Tuesday, October 5, 2021

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 [...]

October 5th, 2021|Categories: Press Clips|

Financial Times, Sunday, October 3, 2021

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.

October 3rd, 2021|Categories: Press Clips|

American Banker, Wednesday, September 29, 2021

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 [...]

September 29th, 2021|Categories: Press Clips|
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