Other industry groups such as miners may join process of setting crucial benchmark following allegations that process is open to rigging
Banks could lose sole responsibility for setting the gold price benchmark under new rules proposed by the industry.
Other parties such as miners and refiners may enter the London gold fix, which has been controlled by banks for almost a century but has come under scrutiny following allegations that the system is open to manipulation.
At a summit held by the World Gold Council (WGC) on Monday, regulators, banks and investors convened to discuss options for the fix, the gold price benchmark that influences trading in the precious metal.
The fix is currently decided twice a day by four banks – HSBC, Barclays, Scotiabank and Societe Generale – who reach a consensus based on submissions from each party.
However, it has been heavily scrutinised following scandals related to Libor, another key benchmark. The Financial Conduct Authority (FCA) fined Barclays £26m earlier this year for failings related to the fix, and MPs were told last week that the market was possibly rigged.
Politicians on the Treasury Select Committee called for the FCA to investigate manipulation of the fix, after its head of market infrastructure and policy, David Bailey, said that participants in it are potentially able to distort the benchmark.
Full article: Banks could lose monopoly on gold fix (The Telegraph)