Fed mulls options for banks in commodities

Jan 15, 2014 | 02:24 PM | Andrea Hotter

Tags  U.S. Senate, hearing, banks, Federal Reserve, physical commodities, Goldman Sachs Group., JPMorgan Chase, Morgan Stanley Barclays Bank

NEW YORK — The U.S. Federal Reserve has announced a consultation on the role of banks in physical commodities ahead of a second Senate hearing. If the comments the Fed receives are anything like those presented at a U.S. Senate hearing on the same topic in July, it could signal the forced exit of banks from physical commodities.

The results of the consultation, which ends March 15, will affect the activities of a dozen banks including Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, Barclays Bank Plc, Société Générale SA and Deutsche Bank AG.

These banks have been granted the authority to engage in physical commodities activities and will be subject to the decision resulting from the Fed review.

Sen. Sherrod Brown (D., Ohio) criticized the Fed at the last hearing for failing to provide a time table for its bank review, which may have prompted the announcement the day before the Senate’s next hearing.....

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