Britain’s biggest banks have lent more than $5 billion to the world’s most active commodity traders, raising fears that they could suffer big losses if the falling price of natural resources sparks a crisis at one of the companies.
More than half of the leading banks’ exposure to commodities is through loans to Glencore, the debt-laden mining group and commodity trader whose shares have suffered sharp swings since a leading analyst warned that they could be worthless.
Glencore accounts for about £2.6 billion of commodities lending by Britain’s banks, analysts at Bernstein, the American investment group, said. However, the use of financial instruments, such as derivatives and other hedging mechanisms, mean that the figure could be far higher.
The world’s top seven commodity traders have