The U.S. Federal Reserve is set to take its first formal step toward limiting the role of Wall Street banks in physical commodities markets this week by issuing a notice to seek public comment on the topic, sources familiar with the matter said on Monday.
The Fed will publish an “advance notice of proposed rulemaking” on Tuesday, laying out the issues it is considering, one day before a second Senate banking committee hearing on the matter, the sources said.
The notice and Wednesday’s hearing come after months of public and political outcry over the risks of allowing banks to trade physical commodities such as tankers of crude oil and pallets of copper.
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