Leverage As Holy Writ

Karen Shaw Petrou’s memorandum to Federal Financial Analytics clients on leverage as holy writ. TO: Federal Financial Analytics Clients FROM: Karen Shaw Petrou DATE: August 14, 2015 In our new papers on custody-bank deposit capacity and the $50 billion systemic BHC threshold, we focus in part on how relevant rules give a competitive edge to all the non-banks operating beyond the full force of these costly standards. In the American Banker analysis of the regional-BHC paper, a public advocate reasoned that the rules are right and our paper is wrong because there shouldn’t be shadow banks. He went on to say that,…