Energy firms fear liquidity void if US capital proposals hit banks
Trades ‘wouldn’t be anywhere near making sense’ for banks
Energy firms are concerned about proposals from the US Federal Reserve Board that would require banks to hold extra capital for dealing in physical commodities, while experts warn that the rules could reduce physical commodity trading activity in the market by 20%.
"The negative consideration is that this could impact liquidity in physical commodities. And it raises questions about how much will be taken on board by other global regulators," says a regulatory manager at a European utility with
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