Banks and commodity activities

A recent article in the Financial Times takes a hard look at some of the issues related to the commodity-related activities of major banks.  The piece is noteworthy for two reasons.

First, it finds that there are some significant flaws in arguments used to support a ban on banks holding physical commodities.

Second, and of more direct interest to us, it indicates the prevalence of misperceptions that plague the broader debate over the “financialization” of commodity markets and its purported impact on commodity prices.

It’s important that this debate be grounded in facts, and not rhetoric, so that markets can function effectively for all of us.

See the FT piece here (subscription may be required).


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