[video] Quick Take: Basel III and Gold's Liquidity
NEW YORK (TheStreet) -- To the month, it's been five years since the 2008 financial crisis. Gold proved to be quite valuable then and as time has gone on.
Will that change? Discussing new regulations on the yellow metal with TheStreet's Joe Deaux was Anthem Blanchard, CEO of Anthem Vault.
In 2008, The Bank of International Settlements -- which acts a regulating and governing body of global banking firms -- was analyzing the financial crisis and which assets had and did not have liquidity. It found gold, which was largely thought to be illiquid, proved to actually be very liquid, Blanchard said.
Because of this, starting in January 2014, the largest banks will be required to lower their lending percentages off of gold to 15% from 50%, due to the new requirements of Basel III. All other financial institutions that lend gold-backed money, will be required to do the same by January 2015.In effect, this will require banks to have higher gold reserve to lend money off of something that could drive prices higher, according to Blanchard. He added that the metal is now being weighted the same as stocks in the Dow Jones Industrial Average due to its liquidity. Aside from mortgages, Blanchard concluded that gold was the only non-financial asset that banks can actually hold, while remaining interchangeable and liquid. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
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