Senators turn up the heat on physical commodities

A key US Senate subcommittee has put the spotlight on banks’ involvement in physical commodities, raising pressure on the Federal Reserve to impose tough restrictions

US Capitol, Washington, DC

The release of a long-awaited US Senate report on banks’ physical commodity activities, accompanied by two days of hearings in which legislators grilled top traders, have ratcheted up the pressure on the Federal Reserve Board to limit banks’ involvement in physical commodities.

The hearings of the US Senate Permanent Subcommittee on Investigations (PSI), which took place from November 20–21, came as the Fed considered whether to raise capital requirements or impose other new restrictions as part