As part of my new role at LBMA of Director of Financial Services, I have been leading work on developing the financial markets in which the precious metals ecosystem operates.
The creation of this position is illustrative of the importance that LBMA is placing on this development work. Nothing can happen in a vacuum; as we strive to advance standards and develop solutions, we need to work closely with crucial stakeholders such as central bank and prudential regulators to ensure a receptive environment for industry improvements.
It's just this type of pan-sector engagement that has been key in our campaign – in collaboration with the World Gold Council (WGC) – for gold to be reclassified as a Tier 1 High-Quality Liquid Asset (HQLA).
David Gornall and I issued a SUERF policy brief in which we assert that there is already a strong case for gold to be included in the HQLA list. Furthermore, recent market events have shown that many investors already utilise gold as a liquidity buffer as it has proven to be an asset that performs well during financial stress events (World Gold Council, 2025).
Our SUERF policy brief was released in response to a paper published by Professor Dirk Baur – commissioned by WGC – which examines whether gold qualifies as an HQLA according to the Basel Committee on Banking Supervision’s criteria. Professor Baur’s paper demonstrates that gold meets all market-based criteria and as many fundamental criteria as bonds for HQLA. His paper also looks at gold’s liquidity, volatility, its performance as a flight-to-quality asset and its diversification properties.
David and I have also found that gold meets all market-based criteria for HQLA. Our paper shows that gold’s daily and high-frequency bid-ask spreads and volume-based liquidity measures are similar to that of the long-term (30-year) US government bond – demonstrating long-term liquidity – and that gold’s liquidity is materially better in a crisis than the 30-year US government bond. Gold is, without doubt, an extremely High- Quality Liquid Asset.
I urge you to read the brief in full to explore our data and evidence. Please reach out if you’d like to find out more about the work we are doing in this sphere.
Indeed, the value of data extends beyond analysis and reporting—it also plays a transformative role in hands-on, creative fields.
Digital technology has been crucial for Ann-Marie Carey (Birmingham City University) and her team, as she expands on the fascinating presentation she gave at LBMA’s Assaying and Refining Conference in this issue. Her article reveals even more about how digital technology assisted the craftspeople working on the restoration of the Staffordshire Hoard helmet, discovered in 2009.
Lauren Moise (Alpvision) reveals how counterfeiting is impacting the industry and how collaboration is essential to stay one step ahead of bad actors. Debajit Saha (LSEG) explores how silver demand in solar photovoltaics looks set to leapfrog in the next five years. And we find out more about how the work of LBMA Referees upholds the quality of the physical bars which underpin trust in the precious metals industry.
I hope you enjoy this issue.
Edel Tully, Director of Financial Services, LBMA
HQLA: Read more about it
Gold: The Missing Piece in Bank Liquidity Buffers?
In the wake of the global financial crisis, regulators stepped in to shore up the banking system with tougher liquidity rules and ushered in the Basel Committee's Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) – two pillars designed to ensure banks can weather short-term and long-term funding shocks. At the heart of these rules is the concept of High-Quality Liquid Assets (HQLA), with the top-tier “Level 1” category dominated by cash and sovereign bonds.
This narrow reliance on central bank money and government debt leaves little room for diversification. Gold, historically a ‘safe haven’, seemed like a natural fit but it was omitted from the 2010 definitions due to limited market data and concerns over price volatility.
In 2018, the picture began to change. A robust set of gold over-the-counter (OTC) trading data finally became available. And now, a 2025 study by Baur et al. makes a compelling case: gold deserves a seat at the Level 1 HQLA table. Its inclusion could ease pressure in regions where sovereign bonds are in short supply or already stretched thin as monetary tools or collateral. As central banks and regulators face mounting challenges, we believe gold to be the liquidity buffer the world overlooked.
As central banks and regulators face mounting challenges, we believe gold to be the liquidity buffer the world overlooked.
