Fear Companies Lurking in Dark Financial Shadows: Simon Johnson

On the face of it, Glencore International AG doesn’t look too scary. With about $80 billion in assets, the Swiss-based commodities trader is a lightweight in comparison to global megabanks like Goldman Sachs Group Inc., one of its trading rivals. Goldman has assets more than 10 times Glencore’s, is more leveraged and has less capital.

So why do executives at Goldman, Citigroup and JPMorgan Chase argue that lightly regulated or unregulated companies operating “in the shadows” -- private equity firms, hedge funds and commodities traders like Glencore -- risk another financial calamity?