Is Gold Being Considered by Basil as a TIER 1 Asset?

May 31st, 2012
in econ_news

Econintersect: Gold and Precious Metal Websites are spiraling stories that banks will soon be allowed to purchase gold.  Here is a sample:

The Basel Committee for Bank Supervision (BCBS), the maker of global capital requirements and whose Basel III rules form the basis for global bank regulation, is studying making gold a bank capital Tier 1 asset.

"Gold has historically been classified as a Tier 3 asset. When determining how much money a bank can loan, the bank's gold holdings have traditionally been discounted 50 percent of the current market value. With value cut in half, banks have little incentive to hold gold as an asset." Frank Holmes,

Follow up:

If this were true, this is a big deal.  Here is a sampling of posts on this subject:

ROSS NORMAN - The Next BIG THING in Gold - Possible Purchase of 1700 Tonnes Gold

Gold to Get It’s Due: Tier 1 Capital Status

Sprout-less Gold Tier 1 Capital?

Gold Isn't Just For Goldbugs Anymore...

Sprout-less Gold Tier 1 Capital?

If 'irreplaceable' gold a Tier 1 banking asset what next?

One thing in common with these posts none are in the mainstream media.  Econintersect has searched the internet (central bank sites and Bank for International Settlements) to find some evidence this was being discussed - nothing was found.

It is hoped one of our readers can point us to some concrete evidence.

hat tip to Tom C.

Steven Hansen

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