China’s Industrial and Commercial Bank of China (ICBC) is interested in joining the London gold price benchmarking process, the bank said during the LBMA bullion market forum here.
“While many western banks are exiting commodity business, Chinese banks see it as a great opportunity,” Zhou Ming, ICBC general manager, said on Thursday.
Last week, Bank of China (BOC) became the first Chinese bank to participate in the electronic platform that sets the benchmark.
This brings the number of participants to eight alongside JP Morgan Chase Bank, Scotiabank, HSBC, Société Générale, UBS, Barclays and Goldman Sachs in the LBMA Gold Price, which formally replaced the near-century-old London Gold Fix on March 20.
The twice-daily gold fix, which had been in operation since September 12, 1919, came under increased regulatory and media scrutiny. A third-party operator was seen as a critical step in modernising the image of the process, while also providing enhanced transparency and compliance with legislation.
ICE subsidiary ICE Benchmark Administration (IBA), which was established in April 2013 to administer benchmarks, now provides the price platform, methodology and overall administration and governance for the LBMA gold price.
“There is still room for growth. We are keen to bring the east and west together. We have received interest from others and we will expand,” IBA president Finbarr Hutcheson said.
China, the world’s biggest producer and consumer of bullion, is seeking to have more influence in international commodities pricing.
“The world is changing and China’s role is quickly evolving. This is a large enough marketplace to include players from around the world,” Phupinder Gill, CME Chief Executive, said.
(Additional reporting by Ian Walkerm editing by Kathleen Retourne)
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