Banks Invest Less in Commodities In Anticipation of Volcker Rule

摘要

Confronted with tougher regulations and dwindling returns, some major investment banks have been scaling back their trading activity in commodities such as natural gas — or at least reevaluating their future role in the commodity markets. The trend is significant because it could lead to volatility in the markets for energy, agriculture or metals. Given the alleged role of banks in price manipulation in some markets, there are some who may welcome the banks' retreat. But because financial institutions have become an important source of liquidity in many markets, their exit could raise questions about who will take their place.