The point of difference raised by the LBMA appears to be around allocated gold versus unallocated. I do not have figures as to the total amount of unallocated gold held by world banks compared to allocated and so not able to judge the impact of this differential treatment under Basel 3. Obviously, it gives banks incentive to hold allocated since it is not discounted but there is a higher cost in moving it into their vaults and keeping it there, and also the reverse movement when selling. Since unallocated places a higher level of risk in terms of dependency on the clearing house, it is not unreasonable to retain the discount.
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