WASHINGTON, Sept 8 The Federal Reserve Board and
two other regulators on Thursday issued a report that recommends
Congress pare back Wall Street's access to commodity and
merchant banking investments.
Leading financial institutions like Goldman Sachs Group Inc
and Morgan Stanley can gain an unfair advantage because of rules
that allow them to invest in the commodities sector, said the
report from the Fed, the Federal Deposit Insurance Corp. and the
Office of the Comptroller of the Currency, all bank regulators.
Existing rules that allow commodity investments "raises
safety and soundness concerns as well as competitive issues,"
the Fed said in a report to Congress required under the Dodd
Frank reform legislation.
The report also recommends that Congress "repeal the
authority of (Financial Holding Companies) to engage in merchant
(Reporting By Patrick Rucker; Editing by Chizu Nomiyama)