Last week, Federal Reserve officials leaked to the Wall Street Journal their tentative plan to limit the ability of Goldman Sachs and big banks to own metals warehouses, power plants, and other physical commodity assets.
But experts say that, if implemented, the policy the Fed is floating would actually expand the
rights of all banks to enter these physical markets, by creating an
official entrance instead of locking the door shut. Presented like a
deterrent, it would also be a novel enabler.
According
to the Wall Street Journal, the Fed’s plan would call for balancing out
the new right to hold assets with a requirement that banks hold more
capital to cover the potential risks posed by these activities. The Fed
declined to comment on the report but is expected to make a decision in
the coming weeks.
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