Last week, prominent figures from the London Bullion Market Association (LBMA) and the World Gold Council (WGC) convened in Basel for a pivotal meeting with the Bank of International Settlements (BIS), advocating for the reclassification of gold as a High-Quality Liquid Asset (HQLA) under Basel III guidelines.

The delegation, including key figures Paul Fisher, Ruth Crowell, David Gornall, Edel Tully from LBMA, and Mike Oswin representing WGC, met with Neil Esho, Secretary General of the Basel Committee, and Noel Reynolds, Head of Basel III Implementation. The focus of the meeting was to discuss the potential benefits and criteria for upgrading gold’s status from Tier 1 to HQLA.

Reclassifying gold as an HQLA holds significant implications for global financial markets, promising enhanced market stability, increased liquidity, and regulatory compliance advantages. This move is expected to bolster confidence and trust in the financial system, contributing to broader economic stability.

LBMA representatives expressed satisfaction with the discussions, noting positive feedback from the BIS on the rationale behind advocating for gold’s reclassification. The delegation presented a comprehensive working paper demonstrating how gold meets the criteria for HQLA status, underscoring advancements in market transparency and regulatory oversight within the gold sector.

Furthermore, the WGC-supported academic study presented during the meeting provided additional empirical evidence supporting gold’s suitability as an HQLA. The delegation received constructive feedback from BIS officials, outlining the necessary steps and information required to advance the reclassification process effectively.

The LBMA and WGC emphasized the collaborative effort between industry stakeholders and regulatory bodies in shaping the future regulatory landscape for gold. Both organizations remain committed to advocating for policies that promote stability and resilience in global financial markets.

As discussions progress, stakeholders anticipate further developments towards formalizing gold’s status as a High-Quality Liquid Asset under Basel III, aiming to reinforce its pivotal role in enhancing financial market dynamics worldwide.

For updates and further information on the reclassification of gold as an HQLA, stakeholders are encouraged to follow developments through LBMA and WGC channels.

The initiative underscores the importance of aligning regulatory frameworks with evolving market dynamics, ensuring robust financial infrastructures that support sustainable economic growth and stability on a global scale.