* Goldman created physicals metals desk two years ago
* Banks have built physical trading operations
* End to prop desks turned banks to physical trading
By Josephine Mason
NEW YORK, July 18 Goldman Sachs has hired
Jeff Romanek as a physical metals trader in New York as the U.S.
bank continues to bolster its physical commodities trading
business, sources told Reuters.
Romanek joined earlier in July after a brief stint at
commodities warehousing company CWT Commodities, two sources
familiar with the matter said.
Before joining CWT at the start of this year, he had been a
trader at Trafigura in Stamford, Connecticut, for
several years with a focus on zinc and copper.
He is the fourth member of the U.S. bank's physical metals
team and the second from Trafigura. The bank hired David
Freeland to join the physical metals team from the Swiss trading
house in November.
A Goldman spokesman declined to comment on the appointment
His appointment comes two years after the bank set up a
physical metals trading desk just months after buying its metals
warehousing business Metro.
It has also expanded its physical commodities reach last
month with the purchase through its Colombian Natural Resources
unit of Vale's coal assets in Colombia for $407 million in cash.
Goldman and other banks have sought to build physical metals
trading businesses in a bid to offset the loss of income from
the forced closure of proprietary trading desks due to stricter
Some though have had to divest assets to comply with
regulations. JPMorgan Chase & Co offloaded its U.S.
metals and concentrates trading arm earlier this year in order
to comply with Federal Reserve regulations.
While the Fed has over the past decade allowed a dozen banks
to freely trade physical commodities such as crude oil, wheat
and copper, it has drawn a line at allowing regulated banks to
own and operate hard assets, unless they do so at arm's length
under merchant banking terms.
Goldman Sachs was given five years to comply with
regulations after converting to holding company status during
the 2008 financial crisis.
But JP Morgan had a tighter time frame after its $1.7
billion acquisition of RBS Sempra's global metals and oil
business in July 2010.