The Federal Reserve faces new pressure to explain why it lets banks trade raw materials and control supplies after congressional witnesses said regulators can’t really grasp what lenders are doing in industrial businesses.
“To expect the regulators to understand the web of relationships that exist here is not rational,” said Joshua Rosner, a bank analyst at New York-based Graham Fisher & Co. Regulators failed similar tasks in the years leading to the 2008 financial crisis, he said.