Indiana Grain Company, LLC

Posted: 07/05/10

By: tomgrisafi

Credit Suisse aims to expand its commodities business across Asia to capitalize on demand growth in the face of volatile markets and tightening regulations in the West, a senior bank executive said.

"Credit Suisse has a strong position through its fixed income and equities businesses in Asia," Alexander Toone, the bank's head of commodities for Asia-Pacific told Reuters.

"The plan for us is to build out the commodities business and really leverage the strength of the bank in the region."

The Swiss bank's growth plans in Asia's commodities and energy sector is in line with others such as Standard Chartered, Societe Generale, Australia's Macquarie and Australia and New Zealand Banking Group Ltd.

Credit Suisse is keen to ride on growth in Asia which produces and consumes a significant proportion of commodities globally, he said.

"High and volatile commodity prices mean that companies are becoming more and more sophisticated in understanding their risks and how they manage that risk," said Toone who spent 10 years at Barclays Capital before joining Credit Suisse in February 2007.

A huge amount of wealth that has been created in Asia will also drive investment in commodities from retail through wealth management business, he said.

"With all the regulatory change occurring in the US and Europe, we've seen more and more of the discretionary hedge funds business relocate to Asia," Toone added.

The US House of Representatives last week approved the landmark overhaul of financial regulations, marking the most sweeping revamp of Wall Street rules since the 1930s in the wake of the 2007-2009 financial crisis.

The senate is set to act on the bill in mid-July, which will give the Commodity Futures Trading Commission (CFTC) oversight of the USD 615 trillion over-the-counter derivatives market, require most swaps to trade via clearing houses, call for extra capital and margin for certain large players and give the CFTC mandate to limit positions in certain markets.

The EU is debating controversial rules for hedge funds and is at an impasse in talks to set up watchdogs for policing banks, insurers and markets.

Source: Reuters