Senate Dems urge Fed to block banking commodity investments

The Hill

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. 

The Fed is considering how to regulate these banking activities. Wednesday is the last day to comment on the agency's proposal.

"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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