Deutsche Bank exits physical metals trading


FXStreet (Barcelona) - The Europe’s biggest investment bank decided to exit physical metals trading in face of declining revenues and the necessity to hold buffer capital as per new regulations.

Deutsche Bank did announce an exit from the physical trading of gold, silver, platinum and palladium, although the bank would continue to trade derivatives linked to the precious metals. The bank also announced an end to trading in credit-default swaps linked to individual companies due to stricter regulations.

Moreover, regulators are forcing banks to hold more capital to avoid bailouts funded by taxpayer money. Earlier this year, Barclays, Credit Suisse and JPMorgan Chase scaled back their commodity business.

JPMorgan Chase’s physical commodity unit was bought by Mercuria, a ten-year-old firm based in Switzerland that started out trading oil but now owns (or has joint ventures with) oil-exploration companies, oil-terminal and pipeline operators, coal and iron-ore mines and biofuel refineries.

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