Levin: Bank involvement in commodities can harm taxpayers

Sen. Carl Levin (D-Mich.) said Wall Street banks are risking the health of the U.S. economy by getting involved in physical commodities.

Levin and Sen. John McCain (R-Ariz.) announced Thursday that the Permanent Subcommittee on Investigations will hold a hearing this month titled “Wall Street Bank Involvement With Physical Commodities.”

{mosads}“Banks have been involved in the trade and ownership of physical commodities for a number of years, but have recently increased their participation in new ways,” McCain said. “Through this subcommittee’s hearing, we will learn about the extent to which this involvement is appropriate for banks to engage in.”

Levin, who will preside over the hearing, said it’s risky for banks to own physical commodities such as oil, natural gas, aluminum, power plants, oil and gas pipelines, and warehouses.

“Our largest banks and their holding companies have become deeply involved in a wide range of physical commodity activities in ways that pose risks to the U.S. financial system, U.S. commodity markets, U.S. businesses and families that use commodities, and U.S. taxpayers,” Levin said. “The objective of the hearing is to provide facts that have been missing from the public debate about the nature and extent of bank involvement with physical commodities and the impact and consequences of that involvement.”

The hearing will be held over two days — Nov. 20 and 21.