Fed Proposes Aggressive Rule on Commodity Holdings

The video discusses a new Federal Reserve regulation requiring banks to increase capital for activities involving physical commodities. The regulation proposes a 12150% risk weight on physical commodities and a 300% risk weight on holdings through complementary authority and merchant banking. The impact on banks like Goldman Sachs and Morgan Stanley is analyzed, showing a sharp initial drop in stock prices with some recovery. The video concludes with ongoing analysis of related headlines.

What is the proposed risk weight on physical commodities according to the new Fed regulation?

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Which investment banks are mentioned as being allowed to own physical commodities?

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What is the significance of the grandfather provision in the context of the new regulation?

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How might the new Fed regulation impact commodity trading firms?

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What observations were made regarding the stock performance of Goldman Sachs and Morgan Stanley in light of the new regulation?

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