Fed Looks Poised To Dial Back Banks' Energy Biz

Law360, New York (July 22, 2013, 8:19 PM EDT) -- Amid growing public and regulatory pressure, the Federal Reserve said last week that it would review a decade-old exemption allowing banks to trade physical commodities, potentially taking the first step to scale back their considerable and controversial presence in the energy sector, experts say.

Regulators have historically held that banks can't engage in commercial activities that stray from normal banking business, and the Bank Holding Company Act generally restricts bank holding companies from holding commodity assets. However, in 2003, the Fed granted the first of a...
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