Goldman Sachs touts commodities muscle as rivals shrink

BY LAUREN TARA LACAPRA Jan 16 (Reuters) – Goldman Sachs Group Inc stuck with commodities trading while rivals have pulled back, and on Friday the bank felt vindicated. While Goldman does not disclose revenue for commodities trading specifically, Chief Financial Officer Harvey Schwartz highlighted it as a bright spot in the bank’s broader fixed-income trading business, which had a rough quarter. “Over the last couple years we’ve often been asked the question: It seems like everybody else is getting out of the commodity business. How come you aren’t getting out of the commodity business?” said Schwartz. Other banks, including JPMorgan Chase & Co, Morgan Stanley and Deutsche Bank, pulled back from commodities trading, deciding to sell large chunks of their operations in part because of political pressure. The Federal Reserve and an investigatory panel in Congress have examined Wall Street banks’ role in trading of physical commodities – actual barrels of oil instead of futures linked to the price oil. Fed officials have expressed concerns that commodities-linked risks, such as oil spills by tankers leased by banks, pose threats to the financial system. Some lawmakers have accused banks, including Goldman, of driving up commodity prices for consumers and businesses for … continue reading

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