The Federal Reserve is asking for public input on whether to put restrictions on banks’ trading and warehousing of physical commodities amid lawmaker scrutiny of potential conflicts of interest and market manipulation, Bloomberg News reported yesterday. The Fed’s request released yesterday seeks comment on 24 questions, including some on the risks posed by bank ownership and trading of commodities such as oil, gas and aluminum by deposit-taking banks and the possible benefits of imposing additional capital standards. “The Board is considering whether additional restrictions would help ensure that physical commodities activities authorized for financial holding companies are conducted in a safe and sound manner and do not pose a threat to financial stability,” the Fed said. The central bank said that it will consider whether further rules are needed after the public comment period ends on March 15.
