Senate Democrats are urging the Federal Reserve to prohibit banks from investing in physical commodities like oil, gas and metals, because of the risks it poses to the U.S. financial system.
Sens. Sherrod Brown (Ohio), chairman of a Senate banking subcommittee, and Elizabeth Warren (Mass.) wrote to the Fed on Wednesday to express their concerns about banks that engage in commodity trading.
"We are concerned that commercial commodities and energy activities expose (Federal Reserve)-regulated financial institutions to unprecedented and unmanageable financial, legal, environmental, and reputational risks," the senators wrote.
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