In the US, the fall-out from financial crisis and pubic outrage over huge government bank bail-outs has collided headlong into another heated topic which already had the public steaming: the price of petrol at the pump. Just as bankers are the focus for public anger over the financial crisis and the use of opaque derivatives, so are 'greedy' speculators - and the commodity derivatives they trade - being blamed for artificially driving up the prices of fuel and food.
Anger was further fuelled in September when the US Office of the Comptroller's (OCC's) latest report revealed that since the onset of the financial crisis, banks have not reduced, but increased, their derivatives trading activities. The total notional value of derivatives held by commercial banks at the end of Q2 this year had risen to $203,460bn, from $165,645bn at the end of 2007. Moreover, according to the report, US banks earned nearly $5.2bn from trading derivatives in Q2, up 225% from the same period last year.
