excerpt...The three banks, among the biggest in the U.S., have faced increased scrutiny in recent years of their activities in commodities. Lawmakers and federal regulators are asking whether banks should be allowed to control power plants, warehouses, oil refineries and pipelines. The Federal Reserve proposed earlier this year restricting banks activities in markets for physical commodities. Under current Fed rules, banks that engage in commodities activities must hold capital to absorb potential losses from the activities . Activities like oil refining and uranium mining expose major banks to catastrophic risks that are poorly understood, Sen. Carl Levin, D-Mich., the subcommittees chairman, said at a news conference Wednesday. The costs from an oil spill, mine explosion or power plant disaster could exceed a banks capital reserves and insurance coverage, potentially forcing taxpayers to bail it out, Levin warned. Theres great risk to the economy, he said. We need to restore the separation of commerce and banking.
Posted on: Tue, 25 Nov 2014 04:11:06 +0000
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