Banks’ physical commodity trading comes under scrutiny

Oil barrels

During the last two weeks of July, many Wall Street executives were undoubtedly looking forward to a much-needed summer break. But instead, bank commodity chiefs found themselves engulfed in a maelstrom of criticism about their firms' involvement in physical commodities. On July 19, the US Federal Reserve Board said it was reviewing a 2003 determination that permitted financial holding companies (FHCs) – a category of firm that includes the parent companies of most US investment banks,