Thank you Qwerty1992 interesting read especially this part>>>...

Thank you
Qwerty1992

interesting read especially this part>>>
"Under the new Basel III standard, physical gold held on an allocated basis is now classified as cash"

*SEE "Basel III:" at bottom

Under the new Basel III standard, physical gold held on an allocated basis is now classified as cash and has the advantage of zero risk weighting, compared with a 15% haircut under Basel II. Besides physical cash notes (which in practice banks try to minimise in their branches), the only other alternative to cash is balances held on the bank’s account at a central bank. The ECB and the Bank of Japan charge negative interest rates on these balances, which for commercial banks in the EU and Japan leaves only physical gold as an alternative.

For the thinking banker, it makes sense to hedge fiat currency exposure (which is the entirety of his business) with some physical bullion. The opportunity cost in the form of lost interest is not a factor, with overnight money-market rates in euros and yen negative. And the regulatory cost of holding gold is being removed.


*Basel III: international regulatory framework for banks. Basel III is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09. The measures aim to strengthen the regulation, supervision and risk management of banks.