Banks counter Fed worries on physical commodities
Goldman Sachs and Morgan Stanley stress public benefits of allowing banks to trade physical commodities, while downplaying fears of catastrophic risk
Besieged for months by criticism of their physical commodity trading activities, Wall Street banks have broken their silence in a set of comment letters to the US Federal Reserve Board, arguing their ability to trade physical crude oil, natural gas and electricity greatly enhances the risk management services they provide to clients.
The letters urged the Fed to refrain from imposing new rules on physical trading by financial holding companies (FHCs) – a category of firm that includes both US
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