EU capital requirements worry commodity trading firms

The finalisation of Mifid II in Europe has rekindled a debate over whether commodity trading firms should be subject to capital requirements. Firms are lobbying strongly against the idea, but regulators and the European Commission will have the final say

Commodity traders argue capital requirements could hamper liquidity

Should commodity trading firms be subject to capital requirements? That contentious question has received plenty of attention over the past few years, but recently the debate has been given added impetus. In July last year, a revised bundle of European Union financial legislation named Mifid II entered into force, ushering in the possibility that commodity trading firms such as trading houses and utilities' trading arms may get targeted with bank-like capital rules.

Not surprisingly, companies