Banks Are Finally Shedding Unnecessary Risks


Banks like JPMorgan take risks every day. While many understand the loan-making and investing activities that make the headlines, not everyone realizes that these same banks are also exposing themselves to the possibility of much greater financial distress. Since 2008, commodities businesses have become a major part daily operations.

Thankfully, the Federal Reserve is thinking about stepping in. Perhaps this is cause for JPMorgan to consider selling its commodities business to trading company Mercuria. The deal is supposedly for $3 billion for a unit that has made $750 million in operating profit a year. Terms aren't expected to be announced from the Fed for a few months, and many expect Goldman Sachs and Morgan Stanley to be largely immune. For more, tune in to the video below.

Commodities trading isn't the banking industry's only secret

Do you hate your bank? If you're like most Americans, chances are good that you answered yes to that question. While that's not great news for consumers, it certainly creates opportunity for savvy investors. That's because there's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banking model. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. For the name and details on this company, click here to access our new special free report.

This segment is from Tuesday's edition of "Digging for Value," in which sector analysts Joel South and Taylor Muckerman discuss energy and materials news with host Alison Southwick. The twice-weekly show can be viewed on Tuesdays and Thursdays. It can also be found on Twitter, along with our extended coverage of the energy & materials sectors @TMFEnergy.

The article Banks Are Finally Shedding Unnecessary Risks originally appeared on

Joel South has no position in any stocks mentioned. Taylor Muckerman has no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs. The Motley Fool owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published