Commodities and banks
Metal bashing
By The Economist
From The Economist
Published: August 20, 2013
Aug 17th 2013 | NEW YORK |From the print edition
Insinuations of market manipulation accelerate another upheaval in finance.
THE deepening relationship between America's judicial system and its biggest banks has reached the world of metals. The Commodities Futures Trading Commission (CFTC) has reportedly issued subpoenas to Goldman Sachs, JPMorgan Chase and others as it investigates complaints that banks and other owners of metals warehouses have been hoarding metals and driving up prices. Private class-action suits filed in federal courts spanning New York, Michigan, Louisiana and Florida have made similar price-fixing allegations, which the banks vigorously deny.
The focus of the complaints is on the storage of aluminium in warehouses licensed by the London Metal Exchange (LME), which was once owned by member banks like Goldman and now belongs to Hong Kong Exchanges and Clearing. The allegation is that end-users of the metal, which is found in everything from car parts to beer cans, have been needlessly forced to queue to get supplies out of the warehouses, paying rent in the meantime. A hearing held last month by the Senate banking committee included testimony by Tim Weiner, a risk manager for MillerCoors, a brewer. He said the aluminium-warehousing system imposed waits exceeding 18 months and all "key elements" of the system for aluminium and base metals worldwide "are controlled by the same entities—bank holding companies."
The civil lawsuits are likely to be consolidated by a federal panel in the autumn. Formal discovery will follow and then, eventually, a trial. The regulatory probes may also lead to another courtroom date for Goldman et al. In the past the chance of a trial has been lower than that of a settlement, but regulators are under pressure to try more cases. The CFTC may be the lead agency at the moment but Mary Jo White, the chairman of the Securities and Exchange Commission, has publicly said her agency is looking into the involvement of banks in commodities.
The wider context of this sudden interest in aluminium is a general question over whether big banks should be owners of physical commodities and the infrastructure for finding, transporting and storing them. Aluminium is not the only bit of the commodities world where Wall Street banks have a big presence. Morgan Stanley has stakes in Heidmar, an oil-tanker operator, and TransMontaigne, a fuel distributor. Goldman is the proud owner of coal mines, a railway and a port terminal in Colombia. JPMorgan Chase paid $36m earlier this year to buy stakes in geothermal power plants in California and Nevada.
Some fret that banks are using their position to manipulate prices: they point to JPMorgan Chase's agreement on July 30th to pay a civil penalty of $285m and disgorge $125m in unjust profits tied to alleged market manipulation in energy markets. Others worry that banks' involvement in physical commodities increases their own risk, and therefore widens the sphere of activities that may require a taxpayer bail-out. What if a bank had owned the Exxon Valdez, an oil tanker that spilled its cargo in Alaska in 1989? Or been running BP's Deepwater Horizon rig? Such questions were asked by witnesses at the Senate hearing.
The Federal Reserve is reviewing a 2003 decision that allowed Citigroup, and by extension other Wall Street banks, to enter into transactions in physical commodities that are complementary to their financial activities. Determining what is complementary and what is not requires the same sort of Solomonic judgment required to distinguish proprietary trading from market-making. Should banks be banned from financing commodities if that sometimes requires taking physical delivery of them?
The prospect of prolonged regulatory attention, let alone a public fight with America's beer-drinking constituency, is encouraging some banks to provide their own answers. JPMorgan Chase has abruptly announced that it will exit the physical-commodities trading business, having spent lots of time and money since the crisis building up such activities.
There are other reasons beyond PR for banks to rethink their commodities business. Constraints on capital mean that it is natural for banks to re-examine their ownership of illiquid, capital-intensive assets. Competition from trading houses has increased markedly. A recent report by McKinsey, a consultancy, found that the number of commodity-trading houses in Geneva alone had risen from 200 in 2006 to 400 in 2011. A relative lack of volatility in the oil price over the past few years has reduced the opportunities for banks to make trading profits. Revenues from commodities for the top ten investment banks have declined for the past six quarters, according to Coalition, a research firm.
This is a cyclical area, however, and a still-appealing one in regions that are big producers or consumers of commodities. Brazil's investment-banking powerhouse, BTG Pactual, is building up its commodities arm. A Chinese giant, ICBC, is reportedly in talks to buy the London commodity operations of Standard Bank, a South African lender. A Chinese broker, GF Securities, recently agreed to buy the commodities-trading unit of Natixis, a French bank. And Chinese buyers are thought to be making inquiries of Goldman, should it want to sell its operations. That raises another question: would American regulators consider these firms better owners?
銀行涉嫌操控原物料市場
2013-08-20 Web only 作者：經濟學人
美國司法系統和大銀行之間的深厚關係如今又再更進一步，踏入了金屬原物料領域。據報導，銀行等金屬物料倉庫擁有者遭控囤積金屬並推升價格，商品期貨交易委員會目前正展開調查，同時也已向高盛、摩根大通等銀行發出傳票。紐約、密西根、路易西安那、佛羅里達等地的集體訴訟，亦提起類似的價格操縱指控，銀行則強烈否認。
提起訴訟的焦點在於由倫敦金屬交易所授權的倉庫所儲存的鋁金屬。鋁的終端使用者被迫在非必要的情況下，被迫排隊等候，才能從倉庫中取得物料。參議院銀行委員會上個月舉行的聽證會中，釀酒商MillerCoors的風險管理人員威納（Tim Weiner）表示，這個鋁金屬倉庫系統的等待時間超過18個月，全球基本金屬倉儲系統全都由銀行控股公司掌控。
從更廣泛的層面來看，各界突然對鋁產生興趣，其實出自一個普遍性的問題，亦即大銀行是否可以同時成為實體原物料以及探勘原物料所需的相關硬體設施的擁有者。華爾街銀行不單在鋁金屬市場佔有重要地位，例如，摩根史坦利擁有油槽營運商Heidmar和燃料配送商TransMontaigne的股份，高盛在哥倫比亞則擁有煤礦、鐵路和碼頭。
有些人擔心銀行會藉此操控價格。涉嫌操縱能源市場的摩根大通，於7月30日同意支付罰款2.85億美元罰款，並交出不當所得1.25億美元。其他人則擔心銀行跨足實體原物料會增加自身風險，未來更有可能必須靠納稅人的錢提供援助。
2003年，聯準會允許花旗集團跨足實體原物料交易，前提為交易必須與花旗本身的金融活動互補，此規則亦適用其他銀行。但聯準會已準備重新檢討這項決議。接下來很長一段時間，監管機構想必會緊盯大銀行，為了避免未來可能陷入集體訴訟，部分銀行已經決定採取行動，例如，摩根大通就突然宣佈退出實體原物料交易。
不過，銀行重新思考是否跨足原物料交易，還有公關以外的原因。資本限制促使銀行必須重新檢視低流動性、資本密集的資產。此外，原物料交易機構之間的競爭明顯增加，過去幾年由於油價平穩，也降低了銀行靠原物料交易獲利的機會；10大投資銀行的原物料獲利已連續下滑六季。
但是，原物料價格通常呈現週期性循環的走勢，在原物料生產或消費大國等地區，原物料投資仍舊十分吸引人。巴西投銀BTG Pactual正成立原物料部門；據報導，中國工商銀行有意買下南非標準銀行的倫敦原物料部門，許多人也認為中國買家正在向高盛詢價，看看高盛是否有意出售原物料業務。這連帶引發了另一個問題：美國監管機構真的認為，把業務交給這些企業會比較好嗎？（黃維德譯）
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