LME rules, banks’ roles are blasted at hearing
Jul 23, 2013 | 05:57 PM
| Michael Cowden
CHICAGO Big banks role in physical commodities markets came under fire at a U.S. Senate hearing July 23, with London Metal Exchange aluminum warehouses in Michigan facing sharp criticism from lawmakers.
MillerCoors LLC currently waits a year to 18 months to get metal out of LME warehouses in the Detroit area, according to Tim Weiner, the companys global risk manager for commodities and metals. "Imagine a warehouse with a huge door marked in and a tiny door marked out, " Weiner said, blasting LME rules, premiums paid by warehouses to attract metal and high rents charged to customers.
Such factors drive up prices for consumers and stymie end-user innovation, costing MillerCoors tens of millions of dollars every year and other end-users billions, Weiner said. MillerCoors has approached the LME about its concerns, but only minor changes have been proposed that "do not go far enough, fast enough" or correct underlying problems such as bank stakes in warehouses and their role in shaping LME policies, he said.....
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