Fed proposes tighter rules on Goldman, Morgan Stanley commodities business

By Joseph Lawler

Published September 23, 2016 4:51pm ET

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Fed proposes tighter rules on Goldman, Morgan Stanley commodities business — Current rules limit banks' ability to trade in physical commodities. But Goldman Sachs and Morgan Stanley were grandfathered into the new rules and kept the ability to do so. (AP Photo/Richard Drew, File) | Richard Drew

The Federal Reserve on Friday proposed new rules on bank dealings in physical commodities, a policy that would especially affect megabanks Goldman Sachs and Morgan Stanley.

A key feature of the new rules would be higher capital requirements for banks that trade in physical commodities — that is, buying, selling, transporting, and storing physical metals or liquids, rather than just paper.

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Federal Reserve Finance Goldman Sachs Joseph Lawler Minusextra Regulations