Future Of British Business
Commodity Traders Are Taking More Risk to Save Cash
- Regulatory group calls for further monitoring in commodities
- Review hindered by lack of data on some key functions
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A group representing the world’s top banking regulators warns that some cash-strapped commodities traders are hedging less since last year’s unprecedented market turmoil — a strategy may leave them more vulnerable if prices spike again.
After investigating the ructions in global commodities markets following Russia’s invasion of Ukraine, the Financial Stability Board said the widespread use of leverage left some physical traders facing liquidity stress as prices jumped. The board’s members include the Federal Reserve and the European Central Bank.