The investigation by the US Commodity Futures Trading Commission (CFTC) is focusing on the role played in warehousing and the aluminium physical market by Goldman Sachs and its warehouse unit, Metro International Trade Services.
It comes amid a number of lawsuits alleging anti-competitive behaviour in warehousing by Goldman Sachs and the London Metal Exchange in connection with aluminium, allegations that both organisations say are without merit.
JP Morgan and Glencore Xstrata, which also own warehouses, have also been named in at least one of the suits.
But at the heart of the matter is a broader debate that has been continuing for some time, concerning the role of banks in physical commodities.
Bank Holding Company Act
There are two main ways for bank holding companies to be active in physical commodities: by virtue of the fact they were already active prior to September 30, 1997, or by being granted the...