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According to the draft documents released, when gold is currently held as an asset, it is risk weighted at 15% – that is, a 15% haircut is taken on its current value for capital adequacy calculations. (See page 86 of the attached Federal Reserve document.)
However, in this same document, they are proposing that there be no (zero) discount.
That would then put gold on the same basis as cash.
He points out that retail investors have more long positions in gold futures than short ones, while “commercial investors” have far more short positions than long. If the rule change is approved, perhaps US banks will start accumulating more gold as an efficient way to bolster their capital.