Fed considers new limits on banks in physical commodity trade

NEW YORK/WASHINGTON: The U.S. Federal Reserve on Tuesday took a first formal step toward restricting the role of Wall Street banks in physical commodities markets, seeking feedback on ways to limit the "catastrophic" risks of dealing with oil tanks or power plants.

In a 6-0 vote, the Fed board agreed to publish a preliminary notice laying out its concerns and potential remedies, following months of growing public and political pressure to check banks' decade-long expansion into the raw materials supply chain.