Carl Levin

I think it is dangerous for financial holding companies to engage in a multiplicity of physical commodity-related activities with the presumption that there is no risk.

The Bank Holding Company Act historically was adopted as an anti-monopoly, antitrust kind of an act, and that spirit of the Bank Holding Company Act needs to be upheld today.

The Federal Reserve absolutely has the responsibility to ensure that financial holding companies... do not conduct activities that are essentially taking unfair advantage of their access to a public subsidy system.

Now, since the Federal Reserve is the source of those competitive advantages, does it have a responsibility to ensure that banks do not use those competitive advantages to engage in market manipulation or unfair trading?

Banks have been found to have engaged in serious manipulative conduct involving things like electricity prices and LIBOR and foreign exchange rates and more.

Metro built a virtual monopoly on the U.S. London Metal Exchange aluminum storage market.

The result was the following: That the line, the queue, to remove metal from these warehouses went from 40 days to 665 days.

Metro tripled the incentives that it paid to attract aluminum to its many warehouses in the Detroit area.

Goldman Sachs acquired a large warehouse business in 2010 called Metro.

You made reference to concentration of power, and we heard yesterday about a severe concentration of power in the aluminum storage market.

The advantage to the banks.

That was very on target.

I urge lawmakers and regulators not to lose sight of what is really at stake in this important public policy debate.

I look forward to hearing from the witnesses why the Federal Reserve has allowed the problems identified by the Subcommittee to fester.

The average consumer, the average citizen, who has no knowledge... of the manipulations that have been carried out.

The Federal Reserve has the power and the responsibility to make important changes that would prevent the sorts of abuses.

We are going to hear tomorrow from those regulators to see what their reaction is to the current state of the world and how they are going to try to make this financial world of ours more safe and more fair and less free of the potential…

Well, at least two of the three of these banks apparently are planning to exit the field, although somewhat gradually, that has caused so much concern, which has grown so vast, which has created such risk and which creates such potential…

When we began this investigation 2 years ago, all three of your financial holding companies were heavily involved with a wide range of commodity activities from coal mines to power plants to natural gas facilities.

Goldman Sachs may command valuation multiples for Goldman Sachs commodities similar to Glencore if--and here is the comment--the business was able to grow physical activities unconstrained by regulation and integrated with the financial…

Goldman's commodities trading arm is an exclusive marketing and sales agent for the coal produced by those mines.

Believe me; if there are catastrophic accidents here, cases are going to be made.

So you can be held liable if you negligently entrust someone.

As recently as July of last year, Goldman had no capital allocated for a catastrophic event.

So there are certain circumstances at least that you would then accept Nufcor's liabilities.