[Lagged2Death]

The key question is whether the LME is free to change these rules...

They did change them, that's where the 3,000 number came from, did you even read this story?

...if the participants are free to use another exchange or start a competing one...

I don't see how that's likely to help. First of all, the metal suppliers have an incentive to use Goldman's warehouses and thus the Goldman-controlled exchange, since Goldman's paying them a kickback. Secondly, if enough metal is going through the LME, that sets the de-facto market price and you'd be daft to sell your Al for less than that, wouldn't you?

[temphn]

You're so hostile that you kick the ball into your own net. My question was whether LME was free to "change" the rule by abolishing it, or whether this was related to an underlying CFTC compliance issue. Because trying to increase the stringency of the rule did nothing:

  Martin Abbott, the head of the exchange, said at the time 
  that he did not believe that the warehouse delays were 
  causing the problem. But the group tried to quiet the furor 
  by imposing new regulations that doubled the amount of 
  metal that the warehouses are required to ship each day — 
  from 1,500 tons to 3,000 tons. But few metal traders or 
  manufacturers believed that the move would settle the 
  issue.

This does not argue in favor of your tacit position that we just need more rules, or more men with guns to enforce them.