“The financial services industry this week lobbed hundreds of pages of comment letters the Federal Reserve’s way to convince the central bank that it should continue to allow the world’s largest banks to trade and invest in oil, electricity and other physical commodities.

“On the flip side, critics of banks’ role in these markets told the Fed to kick them out.

“At stake is a decades-old line of business for banks like Goldman Sachs and Wells Fargo, which Congress and the Fed have allowed to handle these commodities and to finance other companies in these markets. The Fed in January asked for public comment on ways it might need to rein in the banks to protect the financial system from risks such as the financial fallout from catastrophic oil spills.

“Senate Democrats, public interest groups and academics urged the Fed to take a hard line. Meanwhile, the financial giants’ customers, including UPS and several oil and gas and metals firms, said the banks are well-regulated partners for moving commodities and helping hedge price risks.

“What follows are selected recommendations the Fed received this week, the deadline for public comments.”

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