Off the wire
• Nigeria keen on cooperation with Chinese investors  • UN chief urges Yemeni gov't to "engage constructively in peace talks"  • Obama vetoes bill allowing 9/11 terror victims' families to sue Saudi Arabia  • Roundup: Environment, terrorism, refugees dominate UN general debate  • UN starts data partnership with Twitter in support of global development goals  • Celebrations held in university of Latvia to mark "Confucius Institute Day"  • South Sudan thanks China, world for aid in peace, relief efforts  • Roundup: UN reaffirms major nuclear test ban treaty amid DPRK threat  • Toulouse claim first Ligue 1 win over PSG since 2009  • Ligue 1 standings  
You are here: 　 Home

U.S. Fed proposes rule to limit banks' commodity trading

Xinhua, September 24, 2016 Adjust font size:

The U.S. Federal Reserve on Friday proposed a rule to limit the physical commodity activities of financial holding companies in order to help reduce catastrophic, legal and financial risks.

According to the proposed rule, the central bank will require banks to hold additional capital against their investments in physical commodities, limit the amount of physical commodity trading activity that banks can conduct, restrict their involvement with power plants.

The Fed said on Friday in a statement that the possibility of an environmental accident due to the physical commodity trading present significant legal, reputational and financial risks to banks.

The Fed estimated that the amount of capital required to be held to meet the proposed rule will increase by approximately 4.1 billion U.S. dollars in total.

Analysts said that Goldman Sachs and Morgan Stanley are likely to see massive increases for capital required to be held against their commodity trading, because under current law, these two banks are allowed to engage in broader physical commodity trading activities while other banks cannot. Endit