Commodity trading firms probably don’t pose systemic risks to the global economy as the companies draw increased scrutiny and banks step back from raw materials, Trafigura Beheer BV said in a report.
Trading houses, such as Amsterdam-based Trafigura, are smaller than banks and have less debt, according to the study, written by Craig Pirrong, a finance professor at the University of Houston. The firms use financial derivatives mostly to hedge their physical activities, rather than to speculate on price swings, Pirrong said in the report..............................................Full Article: Source
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