WASHINGTON Feb 25 Regulators should clamp down
on banks owning metals warehouses, oil pipelines and other
commodity assets, Democratic Senator Sherrod Brown told two
nominees to the country's derivatives regulator on Tuesday.
Brown, a Wall Street critic who has campaigned against
banks' physical commodity activities, urged the two to be
tougher on the banks, ahead of their confirmation as members of
the Commodity Futures Trading Commission.
"The CFTC must take a more aggressive stance to rein in
these activities that threaten end users and consumers with
higher commodity and energy prices," Brown said in a statement
after meeting the two presidential nominees.
The CFTC is facing a shake-up this year after the departure
of Gary Gensler, its headstrong former chairman. President
Barack Obama has nominated Timothy Massad, a Treasury official,
to succeed him.
Brown said he had met with Chris Giancarlo, a senior
official at swaps broker GFI, and Sharon Bowen, a
partner at law firm Latham & Watkins in New York, the two other
nominees to become CFTC members.
Brown sits on the Senate Agriculture Committee, the body
responsible for the CFTC, which will question the trio in a
hearing to confirm them at the futures and swaps regulator. No
date for a meeting has yet been set.
Banks like JP Morgan and Morgan Stanley have
reduced their physical commodity activities under pressure from
regulators and politicians, after a rapid build-up of the
lucrative business on Wall Street in the 2000s.
The Federal Reserve, worried about the impact a catastrophe
such as an oil spill could have on a bank it oversees, is
planning to issue new rules that would make it less attractive
for banks to be in the business.