Beer Brewers blast wall street banks over aluminum business amid congressional scrutiny

A loose coalition of beer brewers, automakers, Boeing and Coca-Cola is accusing big banks, including Goldman Sachs and JPMorgan Chase, of anti-competitive behavior in the aluminum market, fueling regulatory concerns and prompting a Senate probe as part of an international political battle over Wall Street's expansion into the commodities business.

The Senate Banking Committee next week will hear from MillerCoors and a pair of experts critical of banks' involvement in physical commodities activities and infrastructure assets involving businesses such as storage and transportation. The MillerCoors representative is expected to lash out at banks like Goldman and JPMorgan, which own large warehouses that store aluminum and trade derivatives contracts tied to commodity prices.

Representatives for Goldman and JPMorgan may be asked to testify as the banking panel scrutinizes their commodities businesses. Both companies, under fire in recent years due to a variety of controversies, are reported to be seeking buyers for their metals warehouses.

"When Wall Street banks control the supply of both commodities and financial products, there's a potential for anti-competitive behavior and manipulation," said Sen. Sherrod Brown (D-Ohio), a member of the banking committee. "It also exposes these megabanks -- and the entire financial system -- to undue risk."

The showdown over aluminum between industrial companies and Wall Street comes as some Federal Reserve officials worry about banks' involvement in activities like storing and transporting physical commodities. The debate has introduced the possibility that banks' highly profitable commodities businesses may face new restrictions. The Fed has broad authority over such activities by banks, and researchers at the Federal Reserve Bank of New York, citing news reports, have speculated that the Fed may crack down. Officials familiar with the Fed's supervision of financial groups also said the agency is struggling to figure out how to oversee such businesses, given that they are not a traditional banking activity.