Execs to testify on banks’ commodities holdings

Execs to testify on banks' commodities holdingsSenate Permanent Subcommittee on Investigations Chairman Sen. Carl Levin, D-Mich., shown speaking at a 2014 hearing on Caterpillar's hearing: "Caterpillar's offshore tax strategy(Photo: Lauren Victoria Burke, AP)Executives of three major banks are scheduled to undergo questioning by a Senate panel this week on bank ownership of physical commodities such as oil, natural gas and aluminum and the effect those holdings have on consumers, industry and commodities markets.Jacques Gabillion, head of Goldman Sachs’ (GS) global commodities principal investment group, Simon Greenshields, global co-head of commodities at Morgan Stanley (MS), and John Anderson, co-head of global commodities at JPMorgan Chase (JPM) are slated to testify at the two-day hearing of the Senate Permanent Subcommittee on Investigation.Other scheduled witnesses include two federal regulators, along with representatives of Metro International Trade Services, a global warehouse operator, Harbor Aluminum Intelligence Unit, a firm involved in aluminum industry analysis and outlook, and Novelis, a leader in rolled aluminum products.”Over the last five years, our largest banks and their holding companies have become deeply involved in a wide range of physical commodity activities in ways that pose risks to the U.S. financial system, U.S. commodity markets, U.S.businesses and families that use commodities and U.S. taxpayers, said Sen. Carl Levin, D-Mich., who chairs the subcommittee.The objective, he added, “is to provide facts that have been missing from the public debate about the nature and extent of bank involvement with physical commodities and the impact and consequences of that involvement.”Citing recent increases in bank ownership and trading in commodities, Sen. John McCain, R-Ariz., the panel’s ranking minority member, said the Thursday-Friday hearing would shed light on “the extent to which this involvement is appropriate for banks to engage in.”USA TODAYSenate grills JPMorgan execs on risky tradingFollowing a two-year Senate investigation, the hearing marks the latest in a series of proceedings in which the subcommittee focused an at-times unflattering light on Wall Street practices, such as the so-called London Whale trading episode that roiled financial markets and cost JPMorgan $6.2 billion in losses.After other investigations, subcommittee members have also questioned executives of tech giant Apple (AAPL) and construction equipment manufacturer Caterpillar (CAT) and other U.S. firms about overseas strategies the companies used to reduce their corporate tax bills.USA TODAYApple CEO defends tax tactics at Senate hearingThis week’s proceeding is expected to be the last chaired by Levin, who did not seek a new term during the mid-term congressional elections, which culminated earlier this month with the GOP winning control of the Senate.

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