Why Basel III regulations are poised to shake up the gold market
European banks face beefed up liquidity requirements
under the “Net Stable Funding Ratio’ on Monday
Under the new regime, physical, or allocated, gold, like bars and coins, will be reclassified from a tier 3 asset, the riskiest asset class,
to a tier 1 zero-risk weight —putting it “right alongside with cash and currencies as an asset class,” said Adam Koos, president of Libertas Wealth Management Group.
Since physical gold will have a risk-free status,
this could cause banks around the world to continue to buy more, Koos said, adding that central banks already have stepped up purchases of physical gold to be held in the institutions’ vaults,
and not held in unallocated, or paper form.
Allocated gold is owned directly by an investor, in physical form, such as coins or bars.
Unallocated gold, or paper contracts, often are owned by banks, but investors are entitled to that gold, and avoid storage and delivery fees.
Under the new rules, paper gold would be classified as more risky than physical gold, and no longer counted as an asset equal to gold bars or coins.
Πηγή:
www.marketwatch.com/story/why-basel-iii-...d-market-11624561325
