Once again, the role of banks in physical commodities is back in the limelight as the US Senate gears up to grill witnesses from industry titans Goldman Sachs, JP Morgan and Morgan Stanley later this week.
The hearing, which will span two days and take place in Washington DC, is part of a two-year investigation examining the extent to which banks and their holding companies own physical commodities, as well as own or control transportation and storage businesses, including warehouses.
It’s the same investigation that hit the headlines back in the summer of July 2013 and catapulted the world of London Metal Exchange warehousing into the centre of media attention.
The core of the investigation is that US banks and their subsidiaries are involved in physical commodity activities that threaten the security of the country’s financial system.
Or, as the subcommittee chairman Senator Carl Levin put it earlier this month: “Over...