U.S. official says new rules likely for banks in physical commodities

Reuters

WASHINGTON (Reuters) - A U.S. Federal Reserve official will tell lawmakers on Wednesday that regulators expect to write new rules for banks' physical commodities activities, according to prepared remarks obtained by Reuters.

The rules could include higher capital requirements for banks engaged in those markets or prohibitions on specific risky holdings, Michael Gibson, the Fed's director of bank supervision and regulation, plans to tell a congressional panel.

Lawmakers and regulators have increasingly scrutinized Wall Street's practices in physical commodities markets in recent months. The Fed on Tuesday asked for public feedback on a range of steps to crack down on the biggest banks' activities.

(Reporting by Emily Stephenson; Editing by Steve Orlofsky)

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