The Role of Banks in Physical Commodities


This study explains and illustrates the important business role that banks play in the commodities sectors of our economy. We highlight the size and significance of these sectors and review their business value chains. It demonstrates how the role of financial intermediaries in physical commodities is beneficial in providing businesses access to capital and related risk management services. The study incorporates industry examples to highlight the role of banks in physical commodities and, while it is believed the impact is significant, we have not estimated the overall economic or consumer impact of this role as we have done in other studies.

This report draws on the multidisciplinary expertise of IHS Inc. The study has been commissioned by SIFMA. The analysis and the opinions contained in this report are entirely those of IHS Inc. and we are solely responsible for the contents.

The authors conducted interviews with commodity producers, transporters, converters, end users, bank and non-bank traders and others. We also conducted discussions with our own internal and external networks of industry experts. IHS Inc. supplemented primary research with secondary research including a review of the existing literature, public filings and other accounts to document our fact base and to develop industry case studies.