Morgan Stanley has bought Deutsche Bank’s bulk commodities trading book dealing in coal, iron ore and freight forward contracts to expand in commodities derivatives, a source familiar with the matter said on Thursday.
The acquisition will broaden Morgan Stanley’s customer base, making it the counterparty for structured transactions with a wide range of end-users.
Expansion of its derivatives presence comes at a critical time for the bank, whose physical business has drawn intense scrutiny from U.S. regulators and politicians concerned about the involvement of Wall Street banks in physical commodity markets.
The size of the book is not known, although Deutsche was one of the pioneers of iron ore swaps trading in 2008.
To access the complete Reuters article hit the link below: