7/9/2021 1:51:23 PM GMT
At the end of June, the Basel III accord became binding for European banks. This new set of rules could have an effect on the entire gold market.
On June 28, the Basel III agreement came into force for EU, Swiss, and US banks. On January 1, 2022, it will also be binding for British banks, so I guess it’s high time to cover this issue in the Gold Market Overview.
So, let’s begin by explaining what the Basel III accord is. It is a set of financial reforms that were agreed in 2010 after the Great Recession revealed some “deficiencies” in the global financial system. The name comes from the Basel Committee on Banking Supervision at the Bank for International Settlements, which is based in Basel, Switzerland. The main idea behind the third Basel Standards is to strengthen bank capital requirements in order to limit the risk taken by commercial banks and prevent the replay of the global financial crisis of 2007-2009.