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The Fed seeking industry input on commodity limits

Federal Reserve wants input from banking industry on new regulations

The Federal Reserve is seeking input from the banking industry on how it should regulate banks in commodity markets. This comes as the Senate’s banking committee is holding a hearing to discuss ways to limit Wall Street’s role in the physical commodities markets.  The major policy shift comes after a growing controversy over claims that banks are “using their foothold” in the market to influence supply flows and prices, and conflicts of interests for banks. In July, the Fed publically announced a “review” of its 2003 authorization that first allowed commercial banks like Citigroup to handle physical commodities.

"Each day that we wait to rein in these activities means that end users and consumers will pay higher commodity and energy prices, and taxpayers will continue to be exposed to excessive risks at Too Big to Fail banks," Senator Sherrod Brown (D.-Ohio), who is leading the hearing, said.

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Alexis Harrison

Alexis Harrison is a Connecticut-based writer and public relations professional whose career spans both print journalism and broadcast news. Alexis started her professional life as...

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