The Woman Who Wants Wall Street to Fund a Cure for Blindness

Karen Petrou,

an influential adviser to bankers and regulators, has made a profession of deciphering sophisticated monetary laws. Now she’s attempting to decode one other kind of puzzle.

The conundrum: Matching medical researchers who want cash with buyers who’ve it. A invoice outlining her technique, which would come with a authorities assure, was launched within the Home of Representatives final month.

Her purpose, to treatment blindness, is lofty, and her campaign is private. Although Ms. Petrou, who runs policy-analysis agency Federal Monetary Analytics Inc., consumes dense regulatory tomes sooner than maybe anybody in Washington, it has been years since she may see.

Ms. Petrou, 65, is unsentimental about finance, the place the sharp contours of revenue trump the squishy metrics of doing good. However she additionally believes that pension funds, insurers and others will put money into her so-called Eye Bonds if they will make cash doing it. The plan, which she designed together with her husband and enterprise companion, Basil, envisions a five-year pilot that will finance as much as $1 billion in loans for organizations doing early-stage analysis on blindness.

“Within the scheme of Wall Road, it’s lunch cash anyway,” Ms. Petrou stated. “And possibly it appeals to what’s left of their heartstrings.”

Underneath their proposal, labs and others would get a stamp of approval for tasks deemed promising by the Nationwide Eye Institute, a designation that would assist them line up loans.

The lenders would promote the loans to an Eye Bond Belief administered by monetary establishments that will package deal and promote the loans to buyers—she envisions 10-year bonds. Buyers can be repaid each the principal and curiosity when the bonds mature, and if a lab’s challenge become a business success, the buyers may get fairness. A authorities assure would partially shield buyers if the labs couldn’t repay.

Ms. Petrou grew up in a liberal-leaning house in Westchester County, to an artist mom and book-publisher father. As a toddler, she as soon as challenged the rabbi instructing her Sunday faculty class to “an mental disputation,” stated her mom, Blanche Dolmatch. As a young person, she donned a Colonial costume and mobcap to provide excursions of Philipsburg Manor in Sleepy Hole, N.Y.

“She was at all times good at making speeches and instructing on issues, and blowing off mental steam,” Mrs. Dolmatch stated.

In highschool, Ms. Petrou was recognized with retinitis pigmentosa, a dysfunction that causes gradual imaginative and prescient loss. “We simply form of staggered out of the place,” Mrs. Dolmatch recalled.

Inside just a few years, acquaintances complained that Ms. Petrou didn’t say hello when she handed them. Her peripheral imaginative and prescient was failing.

On the similar time, she was engaged on a doctorate in political science on the College of California, Berkeley. However she took a job in banking, figuring it might supply extra alternatives for girls than academia.

For some time, it did, and Ms. Petrou rose by way of the ranks in political evaluation and public affairs at San Francisco-based BankAmerica Corp. When she was 32, the CEO advised her he wasn’t comfy selling a younger girl to senior vice chairman, in line with Ms. Petrou. She left quickly after.

Since then, she has constructed out her agency and gained a fame for figuring out the trivialities of esoteric laws and their big-picture repercussions. Each banks and regulators rent her to offer a nonpartisan evaluation of the potential results of recent insurance policies. “I’m not arising with loopholes,” Ms. Petrou stated.

Rodgin Cohen, senior chairman of Sullivan & Cromwell LLP, met Ms. Petrou within the early 1990s after they labored on the merger of Mellon Financial institution Corp. and Dreyfus Corp., a controversial proposal on the time as a result of it mixed a financial institution and a mutual-fund enterprise.

“She gave a really broad-based view of every thing that was occurring—how the regulators would work, how Congress would react, and the way the media would react,” Mr. Cohen stated. “It was typical of her method and forthrightness.”

Alongside the way in which, Ms. Petrou’s sight continued to deteriorate. She misplaced her studying imaginative and prescient six months after beginning her agency. Cautious of being pitied or stereotyped, she would inform individuals she couldn’t see a menu as a result of she had misplaced a contact lens.

In the present day, she is nearly fully blind, although a lot of her shoppers don’t know till her German shepherd information canine, Zuni, trundles into their boardroom. She ingests volumes of ponderous regulatory paperwork by listening to screen-reading software program at 400 phrases per minute, pausing to kind her evaluation for shoppers.

“If you will problem Karen on a truth, you higher be proper,” stated

Pete Mills,

who labored for Ms. Petrou and is now head of residential public coverage for the Mortgage Bankers Affiliation. “You’ll be able to’t get something by her.”

Lately, Ms. Petrou has grown extra outspoken in regards to the widening hole between wealthy and poor, together with her perception that postcrisis authorities coverage has exacerbated the issue. In a lecture to the Federal Reserve Financial institution of New York this yr, she scolded central bankers for years of ultralow rates of interest. Her take: The coverage has boosted the inventory market, which advantages buyers, however harmed households attempting to put aside financial savings.

With Eye Bonds, the Petrous aren’t seeking to reinvent themselves however to be heard on a special concern. They consider the impediment to curing blindness isn’t a scarcity of science however a scarcity of funding. Although it’s early days for Eye Bonds, they hope their construction or one thing comparable could possibly be utilized to different ailments.

“Folks at all times say, ‘Why is that this for blindness?’” Ms. Petrou stated. “And I say, ‘Properly, I’m blind, so let’s begin with that.’”