Our mission in all of our proprietary consulting: to ensure that clients become astute government risk managers, able to spot emerging risks and capitalize on opportunities, just as effective credit- or market-risk managers do. Federal Financial Analytics serves as our client’s proprietary think-tank – providing advice as an honest broker based on an objective read of the complex federal legislative, regulatory and political environment to highlight risk, identify opportunity and ensure realistic, forward-looking strategic planning.

Government risk is the risk that a change in law, rule or, sometimes, even mood can affect the prospects for a line of business, a product or service, or even the relative competitiveness of different types of financial-industry charters. Like the other risks financial firms are used to managing, government risk can be anticipated, analyzed and averted. There’s also a positive side to government risk — often, one firm’s threat is another’s opportunity. Federal Financial Analytics does not itself conduct any lobbying activity.  However, it provides analysis and advice for advocacy programs and works closely with the client and lobbying professionals to achieve the client’s goals.

Federal Financial Analytics’ proprietary advisory services include the following:

• M&A Advice: Federal Financial Analytics has advised major private-equity firms evaluating financial-industry (e.g., monoline bond insurance) and bank transactions to ensure the deals anticipate not only traditional financial risk, but also those posed by changing regulatory, legislative and policy developments. Given the government’s new role in financial markets, we have also advised clients on programs such as TARP, TALF and troubled-bank acquisitions, along with related asset sales.  We have also counseled major bank holding companies in complex transactions, including innovative new-product lines and hostile takeovers.
  
  
• Strategic Risk Management: As the Federal Reserve has noted, risk management cannot be focused solely on models and individual business units. It requires an enterprise-wide approach that focuses on strategic issues, including those raised by the far-reaching reform of the financial-services industry now under way. Federal Financial Analytics has advised several large bank holding companies about alternative charters, helping to decide if the national bank, thrift or alternative models work best following reorganizations and acquisitions. We have also analyzed complex capital rules, including the Basel II and III models, identifying proposals that create significant strategic opportunities.  For example, we counseled major providers of credit-risk-transfer products and advised them of ways the Basel rules might ensure appropriate capital recognition for their products. On the other side, we identified the serious risk posed by a new operational-risk capital charge to specialized banks, working with them to ensure that a far less onerous approach was finally implemented.
  
  
• Strategic Advice: In advance of the rewrite of financial-industry rules, Federal Financial Analytics identified emerging trends and advised clients of developments – e.g., changes to the credit ratings agencies – that created strategic opportunities. As major companies face unprecedented challenges, we assessed the changes resulting from the full range of provisions in the Dodd-Frank act and the simultaneous rewrite of the global regulatory road-map.  Key matters include new U.S. and global capital standards, liquidity-risk requirements, mortgage-market reforms, the new framework for asset securitization and the revise standards for deposit insurance, “living wills” and big-firm resolution.
  
  
• Treasury Rescue: In the wake of the Emergency Economic Stabilization Act of 2008, Federal Financial Analytics identified resulting challenges and opportunities, based on a careful read of the new law and a forecast of its outcome throughout the legislative process. The degree to which new capital sources are attractive and even available to clients was assessed and the way assets could be sold or insured through the program identified.  As a result, clients were successfully positioned to avoid adverse consequences and, where possible, take advantage of new business opportunities.
  
  
• Funding Strategies: Federal Financial Analytics has anticipated developments like changing asset securitization requirements such as mandatory credit risk retention. We have also anticipated global liquidity-risks standards and recommended best-outcome strategies as a result.
  
  
• Housing Finance: Federal Financial Analytics has counseled clients throughout the regulatory and Congressional battles surrounding Fannie Mae, Freddie Mac and the Federal Home Loan Banks. We correctly anticipated emerging risks – including providing testimony to Congress as early as 2003 on this point – and warned clients about them. We also monitored GSE activities to anticipate new business ventures that posed competitiveness or systemic-risk concerns, supporting client analysis and advocacy on these critical issues. Going forward, we are anticipating the significant new regulatory structure governing housing finance in general and the GSEs in particular, assisting clients to position themselves advantageously in the midst of these strategic challenges.
  
  
• Board and Senior Management Reports: Incorporating all the skills noted above, Federal Financial Analytics provides boards of directors and senior management with regular legal and reputational-risk assessments.