The Fed has been pushing major banks to distance themselves entirely from physical goods trading, such as metals and oil. JPMorgan has been disputing with the Fed for some time, and they were unsuccessful at satisfying them in how they were operating the metals warehousing facilities that they bought. There is a lot of controversy over big banks that are “too big to fail” in whether they should be allowed to keep investing in risky businesses. Oil tankers and power plants, the Federal regulator states, is a risky business proposition and isn’t something that these companies should be involving themselves in. This has come to the forefront as many banks are hitting dire straits with events such as the housing bubble collapse. As far as JPMorgan, they have decided it would be better off to simply sell the metals exchange, as they don’t want to deal with the federal oversight and the constant legal threats. Many companies seem to be turning to valuable metals, such as copper and aluminum, as an alternative investment to simple financial investments. With the value of the U.S. dollar in flux, there’s a good chance that the Fed doesn’t want banks to stay afloat based on the value of their metals stored up in warehouses.


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