Until the credit crunch hit, the Fed took a generous line when it came to banks seeking to enter the energy business. Many banks had been given the green light to own energy trading units as well as physical energy assets, such as actual power plants. The profit potential from this tight linkage was exemplified by Citigoup's Phibro unit's ability to mint money.

The Financial Times notes that most banks "simply lease tankers, book pipeline capacity or arrange to buy power from a generation station." But others, like Morgan Stanley, are outright owners of assets. But the bank's ability to operate in this area is now up in the air. "The Obama administration is also seeking to reinforce the historic separation between banking and commerce. Meanwhile, the Fed is weighing banks' right to own operating commodity assets such as power plants and pipelines," writes FT. Will it reverse it pre-crunch generosity?

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