On May 25th, the European Parliaments's
Committee on Economic and Monetary Affairs
(ECON)unanimously approved the acceptanct
of gold as collateral by central counter
parties which are financial institutions
that operate as intermediaries between
securities and market participants.
The Parliament is putting it's weight
behind the argument that gold is an ideal
form of high quality liquid collateral.
Gold's strong price gains in recent years
have seen its appeal collateral increase,
The G20 wants to reduce financial market
risk by putting more products in clearing
houses, increasing the demand for collateral
as security against risks. Gold has become the perfect collateral asset.
Gold is emerging as a solution because it lacks
credit risk and its countercyclical behavior
make it an ideal source of protection to the
downside risks of trading.
Didn't Gold once back the U.S. Dollar?????
