Mayra Rodríguez Valladares has been quoted in numerous publications in the US, Europe, Asia, and Latin America.
MRV Associates Managing Principal Mayra Rodriguez Valladares discusses policy signaling by the Federal Reserve and says she is concerned that the interest rate risk story is turning into a credit risk story. She speaks to Bloomberg’s Tom Keene and Lisa Abramowicz on “Bloomberg Surveillance. View appearance on Bloomberg Surveillance here
“What’s important here is we do need policy responses at this stage,” said Mayra Rodriguez Valladares of MRV Associates, a former analyst at the New York Fed. One idea: Have the Federal Deposit Insurance Corp. step up with higher coverage limits (and have big banks pay the freight). Monetary policy is trickier. “We’re still at rates that are the highest in 15 years, she said. “It’s not like you can just turn off the spigot. My biggest fear is we’re already starting to turn from an interest-rate risk story to a credit-risk story.” Read more
According to a response by the FDIC to questions from GlobeSt.com, recovery is a “term of art” meaning the proceeds from sales of assets. “Recovery usually means that if any of those loans fail, they’re on the balance sheet,” Mayra Rodriguez Valladares, managing principal of banking consulting firm MRV Associates, tells GlobeSt.com. “Let’s say JP Morgan is able to get back 50% [of the loan] as the recovery. The loan fails, the FDIC is the first lien here.” If the 80-20 split is in play, then the FDIC would get 40% of the original amount of the loan and JPMorgan would receive 10%. This still leaves open the potential for JP Morgan to review the status of loans. “The portfolio is pretty good from a credit perspective,” says Rodriguez Valladares. Read more here.
Getting bank supervisors to act quickly is likely to prove tricky, said Mayra Rodríguez Valladares, the managing partner of consultancy MRV Associates and a former New York Fed staffer. The supervisory process takes time, and examiners deployed by state and federal banking regulators often don’t have the incentive to push for rapid changes at the banks they oversee. In some cases, examiners can be punished for being too aggressive, she said. A former Federal Reserve Bank of New York examiner, Carmen Segarra, claimed she was fired for failing to water down concerns related to a giant global bank in a 2014 lawsuit, which was eventually dismissed. “What Barr is saying is aspirational, it’s fabulous. But I want to know how he’s going to change the culture,” Rodríguez Valladares said. Read more here