LBMA Gets A Lifeline


[i] See here.

[ii] See here.

[iii] See PRA Rulebook (CRR) Instrument 2021

[iv] See Open Letter to LBMA Board of Directors by Paul Mylchreest, Hardman & Co, January 2020, page 33.

[v] LBMA members currently offer custodial services, and I understand that for the largest customers these can be as low as 8 basis points. With LBMA banks no longer profiting from gold derivative turnover, custody rates including vaulting are likely to rise. Whether LBMA customer business remains on a balance sheet or migrates to custodial services remains to be seen.

[vi] See here. In this submission jointly signed by the World Gold Council unallocated gold was presented solely as a convenient means of gold dealing, and nowhere was the reader informed that the BIS regarded forwards as derivatives. This is an important misrepresentation because gold and physical commodities outside a normal settlement cycle is covered by different rules in Basel 3.

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