Banks hold risky operations with raw materials
On Wednesday, January 15 a regular hearing took place at the U.S. Senate. During the session, lawmakers insisted that regulators have made every effort to limit the participation of Wall Street in commodity transactions, as reported by Reuters.
On the eve of the hearing, the Fed announced that has already begun to examine possible methods of limiting resources trading by big banks. Fed is concerned that the banking operations of commodity assets, such as tankers of long-term lease and maintenance of their own power plants, are quite risky.
Representatives of the Federal Reserve announced the following measures to help avoid the risks associated with trading commodities. First, you must mark the times when the credit institution may enter into transactions in commodity markets. Secondly, we should limit the scope of investment in this area. In addition, the need to develop requirements for banks' equity, whose work is related to commodity markets and to organize regular checks of these banks.
U.S. lawmakers suspect that financial institutions manipulate raw assets. Despite the suspicions of Congress, the Fed noted the risks to the U.S. financial system by introducing a series of bans on trade in raw materials.
