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Gerth Flury

Sweden

educator

Member since June 13, 2013


  • JPMorgan Chase (NYSE: JPM ) nosed closer to a settlement with the Federal Energy Regulatory Commission over the past week as both parties work toward resolving the issue of energy market manipulation in California and other key markets. That state's Independent System Operator had estimated that the engineered run-up in electricity prices added up to $73 million, so the big bank's reputed penalty of $410 million seems like a pretty good deal -- except for the rumored lack of sanctions against those responsible for this scandal. However, as The Wall Street Journal notes, nothing is written in stone yet, and things could possibly change.

    Banks' involvement in commodities questioned Perhaps the terms of the settlement will change, but the myriad ways in which the largest banks manipulate commodities markets very likely won't -- unless regulators force them to. Happily, the winds of change may be in the air, as a Senate subcommittee plans hearings on July 23 on the issue of banks and commodities, spurred by consumer and corporate complaints. In addition, the Federal Reserve is taking a fresh look at the 2003 decision to allow banks to immerse themselves in commodity markets, when it opted to allow such activities as "complimentary to financial activities."

    Banks have been manipulating commodities in so many ways For years, JPMorgan, Goldman Sachs (NYSE: GS ) , and Morgan Stanley (NYSE: MS ) have been making a killing in the commodities markets, scooping up mass qua...