FINANCIAL TIMES: Goldman Sachs, JPMorgan and Morgan Stanley exposed themselves to catastrophic financial risks, environmental disasters and potential market manipulation by investing in oil, metals and power plant businesses, according to a Senate report.
The findings of the two-year probe by the Senate permanent subcommittee on investigations said the banks’ involvement in physical commodities put them in the same vulnerable position as BP, which has been hit with multiple lawsuits and billions in fines as a result of the 2010 Gulf of Mexico oil spill…
A 2012 Federal Reserve of New York commodities team review found that the three banks and a fourth unnamed financial group had shortfalls of up to $15bn to cover “extreme loss scenarios”, the report said. The Fed is considering restricting banks’ physical commodity activities… (more)
