The U.S. Federal Reserve Board announced that it is considering possible new rules to address financial firms participation in the physical commodities business.
The Fed said today that it is considering whether additional restrictions are necessary to help ensure that financial firms’ physical commodities activities are “conducted in a safe and sound manner and do not pose a threat of financial stability.”
It issued an advance notice of proposed rulemaking today seeking comment on various issues, including: the risks that these activities could pose to the safety and soundness of financial holding companies, and to financial stability more broadly; potential conflicts of interest and other negative effects; and, whether it should impose additional capital requirements, or other restrictions, for these activities.
Comments are due by March 15. The Fed says that it will decide whether to propose new rules after reviewing the comments.