A U.S. Senate report on commodity-market activities at big Wall Street banks accuses the firms of being so powerful they were able to influence prices, gain trading advantages and put the broader financial system at risk by entering volatile businesses such as uranium trading and coal production, the Wall Street Journal reported today. The two-year, bipartisan probe by the U.S. Senate Permanent Subcommittee on Investigations is the most extensive look at how banks like Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley built up voluminous inventories of aluminum, copper and other commodities. The report said that the banks often exceeded regulatory limits on the size of commodity holdings. The findings are likely to put additional pressure on the Federal Reserve as it considers whether to restrict or reduce Wall Street banks’ role in physical commodity markets. A two-day hearing on the report begins today, with Fed Gov. Daniel Tarullo expected to testify on Friday.
