July 17 A U.S. Senate committee will hold a
hearing next week on whether banks should control physical
storage for commodities, signalling lawmakers may be toughening
their stance on the controversial but lucrative business for
giant Wall Street firms.
Goldman Sachs Group Inc, JP Morgan Chase & Co
and Morgan Stanley all have business units involved in
the storage of physical commodities such as metals and oil, as
well as being involved in commodities trading.
The hearing comes as a five-year grace period from the U.S.
Federal Reserve that allows banks to hold physical commodities
assets is set to expire before the end of the year.
The panel will hear on July 23 from beer and can maker
MillerCoors and two experts who are critical of the banks'
involvement in physical commodities and infrastructure,
including businesses such as storage and transportation.
"When Wall Street banks control the supply of both
commodities and financial products, there's a potential for
anti-competitive behavior and manipulation," Sen. Sherrod Brown
(D-Ohio), a member of the banking committee, was reported as
saying in the HuffingtonPost.
"It also exposes these megabanks -- and the entire financial
system -- to undue risk," he said in comments published on
The Huffington Post said representatives for Goldman and
JPMorgan may also be asked to testify before the banking