Banks retreat from commodity derivatives

Increasing capital requirements and other regulatory constraints are cutting the headcount and risk-taking ability of banks in commodity and energy derivatives. Might this diminished role pave the way for less regulated participants to take their place? Mark Pengelly reports

Investment bankers admit they are unlikely objects of sympathy. Since the financial crisis, bankers have been subject to an overwhelming degree of popular criticism, possibly only approaching the level of hatred afforded to arms manufacturers, large pharmaceutical companies and the tobacco industry. In response to the critical public mood, politicians have set in train a variety of regulatory reforms that will make it harder for banks to compete in commodity and energy derivatives. Consequently