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

American Banker, Monday, July 26, 2021

Will states lead the way on expanding CRA to nonbanks? By Hannah Lang After decades of calls to expand the Community Reinvestment Act’s anti-redlining obligations to nonbanks, the idea is going mainstream thanks to key endorsements from states and even the chairman of the Federal Reserve....Many acknowledge that the impact that state legislation could have on investment in low- to moderate-income communities is likely limited. “I think it has to be federal" to be effective, said Karen Petrou, managing partner at Federal Financial Analytics. “All of these are national markets, especially mortgage origination.”...Petrou noted that the banking regulators in their CRA reform discussions could do something at the edges without authorization from Congress to extend CRA-like obligations to nonbanks....“It hasn't been discussed, but you could do it, for example, in this new rule [by] potentially saying, insured depositories may not partner with a nonbank unless the nonbank activities supported by [...]

July 26th, 2021|Categories: Press Clips|

Yahoo! Finance, Saturday, July 17, 2021

How the Federal Reserve can really help America Andy Serwer with Max Zahn 1913 was a big year for America. On October 7, Henry Ford introduced the world’s first moving car assembly line in Highland Park, Michigan. Then two months later, on ​​December 23, Congress passed the Federal Reserve Act creating our nation’s central bank....Karen Petrou, managing partner of Federal Financial Analytics and the author of “Engine of Inequality: The Fed and the Future of Wealth in America,” notes in her opinion piece in the New York Times this week that: “assets the Fed has taken out of the economy as part of Q.E. (quantitative easing or buying) now stand at $8.1 trillion, or about one-third of gross domestic product.” That’s a lot. ...There seems to be a louder drumbeat coming from the media ranks as well. Besides Petrou’s Times piece, Frontline released “The Power of the Fed,” this week, which questions why the stock [...]

July 17th, 2021|Categories: Press Clips|

PBS Frontline: Tuesday, July 13, 2021

The Power of the Fed When COVID-19 struck, the Federal Reserve stepped in to try to avert economic crisis. As the country’s central bank continues to pump billions of dollars into the financial system daily, who is benefiting and at what cost? Watch FedFin's managing partner, Karen Petrou in this documentary. https://www.pbs.org/wgbh/frontline/film/the-power-of-the-fed/

July 13th, 2021|Categories: Press Clips|

Marketplace, Tuesday, July 13, 2021

Big banks’ second-quarter earnings come with caveats By Amanda Peacher Second-quarter earnings are trickling in this week from some of the giants of the sector: JPMorgan Chase, Goldman Sachs, Citigroup and Bank of America among them. A lot of economists feared the worst for banks during the pandemic — fears that now seem to be largely behind them. When a bank decides it’s OK to let those reserve funds loose, that can improve its results. "They can put that money back to work for investors or in the economy,” said Karen Petrou, managing partner of Federal Financial Analytics. But it’s not all rosy for big banks right now, Petrou added. “This is where ultra low interest rates not just hurt bank earnings, they really hurt the ability of most American households to save, which is the most important way Americans protect themselves against the future,” she said — if interest [...]

July 13th, 2021|Categories: Press Clips|

Wall Street Journal, Tuesday, July 13, 2021

The Dwindling Value of a Dollar By James Freeman The Federal Reserve is still engaged in a historic frenzy of dollar creation and, perhaps not surprisingly, each one of our existing dollars is still losing value. Will Fed officials continue finding reasons to believe that inflation is not a problem—or will they resolve to stop creating it? ...Karen Petrou, managing partner of Federal Financial Analytics, notes in the New York Times that the ocean of money from the Fed is most useful to people who already own lots of assets: Low interest rates set by the Fed spur lending, creating more demand to purchase homes and forcing prices higher. Rising equity is great for existing homeowners, but richer Americans who own property are the ones who benefit most. Perhaps the rise in housing prices, like the price spikes of so many other goods, is merely transitory. A recent paper from [...]

July 13th, 2021|Categories: Press Clips|

New York Times Opinion, Monday, July 12, 2021

Only the Rich Could Love This Economic Recovery By Karen Petrou Conventional wisdom has it that the lower a central bank sets interest rates, the faster the economy grows. But the longer rates stay ultra-low, it’s not the economy that grows — it’s inequality.There are signs of worsening inequality across the U.S. economy. But recent surges trace back to a major change after 2008, which transformed how America fights economic recessions. The Fed, which controls America’s monetary policy, is mired in conventional thinking, even though its policy since 2008 has been unconventional in scale, scope and omnipotence. Adhering to its “lower rates are better” axiom, the Fed has kept “real” U.S. short-term interest rates at — or even below — zero, after taking inflation into account. The Fed now plans to keep rates ultra, ultra low until about 2023, even if inflation ticks up. https://www.nytimes.com/interactive/2021/07/12/opinion/covid-fed-qe-inequality.html

July 12th, 2021|Categories: Press Clips|

New York Times DealBook, Monday, July 12, 2021

BioBonds Would Use Wall St. Tools to Fund Medical Research By Ephrat Livni In the development of disease treatments, the stage between basic research and advanced clinical trials is known as “the valley of death.” While ample public grants fund early-stage research and pharmaceutical companies are willing to fund studies on proven solutions, research at the “translational” stage, when basic findings are applied to potential treatments, is notoriously difficult to finance. Some promising treatments are never pursued as a result. The pandemic made this perilous valley “a whole lot deeper,” said Karen Petrou, the co-founder and managing partner of Federal Financial Analytics, a financial services consulting firm in Washington that created a new financial instrument designed to help solve this problem. During the pandemic, clinical trials were halted, resources were diverted from labs, attention was focused on immediate needs, and much funding dried up. New research projects were difficult to [...]

July 12th, 2021|Categories: Press Center, Press Clips|

Podcast: Trend Following Radio, Sunday, July 4, 2021

Karen Petrou Interview with Michael Covel “Let’s get a little controversial today…Following the 2008 financial crisis, the Federal Reserve’s monetary policy placed much greater focus on stabilizing the market than on helping struggling Americans. As a result, the richest Americans got a lot richer while the middle class shrank and economic and wealth inequality skyrocketed. Karen Petrou offers pragmatic solutions for creating more inclusive monetary policy and equality-enhancing financial regulation as quickly and painlessly as possible. Karen Petrou knows what drives the decisions of federal officials and how big banks respond to financial policy in the real world. Instead of proposing legislation that would never pass Congress, the author provides an insider’s look at politically plausible, high-impact financial policy fixes that will radically shift the equality balance...." Listen here: https://podcasts.apple.com/us/podcast/ep-986-karen-petrou-interview-michael-covel-on-trend/id151217747?i=1000527825153

July 4th, 2021|Categories: Press Clips|

Bloomberg TV, Monday, June 28, 2021

FedFin's managing partner, Karen Petrou, discusses Engine of Inequality with Bloomberg Markets hosts Caroline Hyde, Romaine Bostick, and Taylor Riggs. Watch at 33:52 min: https://www.bloomberg.com/news/videos/2021-06-29/bloomberg-markets-the-close-06-28-2021-video

June 29th, 2021|Categories: Press Clips|

The Hill Op-Ed, Sunday, June 27, 2021

Common sense rules can cure cryptocurrency's curse By Karen Petrou Nothing in rule or law prevents any of us from taking our wages and asking the dry cleaner to hold on to them for us because we always get our shirts back. Even if the dry cleaner is closer, we go to the bank because money really matters and we take for granted that any money we deposit at a bank is money we get back.  Federal Deposit Insurance Corp. (FDIC) insurance solves the information asymmetry that would otherwise make it hard for most of us to know to whom to entrust our funds, and rules on banks back up this federal promise. This all may seem obvious, but it proves a long-forgotten axiom — rules build deep, trusted markets. This we need to remember as battles wage over the Basel Committee on Banking Supervision's proposal to apply tough safety-and-soundness standards to [...]

June 27th, 2021|Categories: Press Clips|
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