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Morgan Stanley BANK rids itself of Commodities holdings | Banking Insight

WASHINGTON, DC - JANUARY 18:  (L-R) Federal Re...

WASHINGTON, DC – JANUARY 18: (L-R) Federal Reserve Board Governor Daniel Tarullo, Securities and Exchange Commission Chairman Mary Schapiro, Commodity Futures Trading Commissioner Chairman Gary Gensler and Federal Deposit Insurance Corporation Acting Chairman Martin Gruenberg listen during a joint hearing before the Capital Markets and Government Sponsored Enterprises Subcommittee and Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee January 18, 2012 on Capitol Hill in Washington, DC. The hearing was focused on ‘Examining the Impact of the Volcker Rule on Markets, Businesses, Investors and Job Creation.’ (Image credit: Getty Images via @daylife)

Morgan Stanley stayed away from yet another NASDAQ carnage in Kraft and Mondelez trades inaugurated on the exchange yesterday. While all trades that caused an almost 30% bump in Kraft to $58 were canceled by brokers, Morgan Stanley was barely luck to stay away from another broking/trading related controversy and financial penalties that catch it by the scruff of the neck when Capital has become scarce in light of the Volcker Rule’s coming implementation.

Morgan Stanley was one of the Wall Streeters to set up a Wall Street Refinery , building up crude stocks in its trade on Oil prices and earning revenues of nearly $3 B annually from commodities. In light of its new seriousness as a bank, the traders are yet again being sold upstream to investors in Qatar even a s Commodities revenue has dwindled to barely $1 B

The Commodities Business now majority owned by QIA will be able to continue to carry principal risk on behalf of investors in commodities from Oil and Soyabean to Copper, Iron and Gold. The commodity arm also owns Pipeline operator Transmontaigne to help it run commodity linked derivatives and take agency risk for customers as Principal /Counterparty

According to the FT Report regulators could ask Morgan Stanley to start selling its warehouse holdings of commodities by November 2013 if the deal to sell the business to Qatar is not completed.

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This entry was posted on October 4, 2012 by in Amitonomics, Banking, Retail Lifestyle, US.


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