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World Gold Council and London Bullion Market Association are committed to working together for the advancement of gold’s reclassification as a High Quality Liquid Asset. Through clear and transparent research, quality data and analysis, we are striving to present gold’s clearcut merit as a Level One HQLA.

This is not simply to benefit the gold industry, we believe that the use of gold within the prudential regulatory system could be part of the solution for future adverse financial liquidity events and other forms of systemic risk as was demonstrated during the COVID-19 and the 2023 US banking crisis.

Gold, in 2012, initially was on the European list as a Level 2 HQLA candidate; however in 2013, the European Banking Authority created its own list of assets that could be used as HQLA; gold was not included. Although gold did meet the required liquidity characteristics for HQLA, the lack of available OTC trading data at the time meant this could not be evidenced to the level required by the EBA. LBMA has resolved this obstacle: in 2018, LBMA started to calculate weekly OTC trading data from its Members, before moving to daily reporting in 2019; thus actively demonstrating gold’s liquidity characteristics plus OTC market depth and breadth.

In the 16 years since the definitions were written, the landscape of global financial markets has changed dramatically, and gold market transparency has been significantly enhanced. We can now demonstrate that gold meets the HQLA criteria under the Basel III framework and it is time to review the uniform definitions and include gold as a HQLA.