Tarullo Targets Commodity Risks at Goldman Sachs, Morgan Stanley
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Federal Reserve Governor Daniel Tarullo questioned whether Goldman Sachs Group Inc. and Morgan Stanley should be allowed to own physical commodities because the practice exposes them to risks outside traditional banking.
The New York-based companies are allowed “to engage in the extraction, transportation of potentially highly combustible materials with substantial risks associated with them,” Tarullo told the Senate Banking Committee on Thursday. Such activity appears to “breach the wall between banking and commerce.”