Name Banks Join Commodities Venture
NEW YORK - A group of U.S. and European financial institutions and energy companies said Tuesday that they are forming an Internet marketplace for commodities trading.Financial firms in the IntercontinentalExchange venture include Deutsche Bank, Goldman Sachs Group Inc., Morgan Stanley Dean Witter & Co., and SG Investment Banking, a division of Societe Generale. Among the energy companies are BP Amoco, Royal Dutch/Shell Group, and Totalfina Elf Group.
The Atlanta-based outfit plans to begin trading in a variety of petroleum and precious metals-based products this year and to develop markets for commodities such as natural gas, electrical power, and base metals.
"We believe that market participants will determine what functionalities are most important to them in this new marketplace," Francois-Xavier Saint-Macary, head of commodities trading at SG Investment Banking, said in a statement. "One could imagine the ability to view OTC and futures markets on the same screen, as well as to route orders to existing futures exchanges or to their electronic platforms, credit intermediation features and links to many other industry related sites."
- Dominick Fontana
Fed Hike Replicated in Prime Lending Rates
NEW YORK - Several of the nation's largest banks said they would raise their prime lending rates to 9% from 8.75% after the Federal Reserve Board's decision on Tuesday to raise the Federal Funds rate by 25 basis points, to 6%.At press time, banks that had announced the increases included FleetBoston Financial Corp.; Mellon Financial Corp.; Bank One Corp.; Wells Fargo & Co.; Morgan Guaranty Trust; Chase Manhattan Corp.; Bank of America Corp.; and First Union Corp. Each banking company said the prime lending rate would take effect Wednesday.
The discount rate on emergency loans to banks also increased - to 5.50% from 5.25%, according to the Fed. The last time the Fed raised the funds rate - also by 25 basis points - was on Feb. 2. At that time many banks boosted their prime rates to 8.75%, from 8.50%.
- Dominick Fontana