Houston—The Federal Reserve Board is expected to rule by early October on whether bank holding companies can continue owning physical commodity assets, such as power plants and gas storage facilities, and whether they can continue trading physical commodities. A ruling that would force big domestic and foreign banks out of the physical side of the commodities business has the backing of some heavy hitters in Washington, who have argued that the banks “may have the capacity to influence prices through the related business ownership,” as one member of the Commodity Futures Trading Commission put it in a speech last weekend.
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