Bank physical commodity trading is desirable, not essential

Mark Pengelly - Energy Risk

In an effort to convince regulators of the merits of physical commodity trading by banks, the Securities Industry and Financial Markets Association commissioned a report by Colorado-based research firm IHS, which was released on September 19. That report includes five case studies that demonstrate exactly what banks do in physical commodities, and laments that their role is essential but poorly understood.

A poor understanding has certainly been shown by the intemperate and unreasoned debate tha