Regions

Goldman Sachs and Morgan Stanley were known as the "Wall Street Refiners". The two banks were on the spotlight after JPMorgan Chase & Co announced preparing an exit of its physical commodities trading. Two decades ago, these banks were known to be masters in physical and financial commodities. These banks have dominated Wall Street's participation in the supply chain of natural resources for thirty years.

However, Morgan Stanley looked to sell its commodity unit in 2012, making Goldman moved a scale back on its physical operations.

Reuters received copies of letters between the said banks and the Federal Reserve. The letters contained discussions affirming the two banks were in conforming or divesting its activities that fall outside the normal range of commercial banking.

From last March, Goldman looked to sell its metals warehouses unit, Metro International. The financial institution has also reaffirmed its commitment to another commodities unit, J. Aron. The latter company was where Lloyd Blankfein established his career.

A possible spin-off or sale of its commodity unit was also looked into by Morgan Stanley from since last summer.