Market Insider

CORRECTION: FDIC Not Considering Gold as Tier 1 Capital

An earlier version of this story incorrectly suggested that the FDIC was considering allowing banks to include gold bullion as Tier 1 capital.

According to a spokesperson for the FDIC, the report in question actually proposes “no change to banking capital rules with respect to gold.”

Cash and gold
Lilli Day | Photodisc | Getty Images

A recent proposal by the FDIC created some confusion in the gold markets in part, because it includes language listing “Gold bullion” as a “Zero Percent Risk-Weighted Item”, equivalent to cash and T-bills.

Several reports suggest that recent proposals would in some way redefine or, revalue gold in some way as it relates to the Tier 1 Capital of a bank.

Gold bullion is currently considered a zero percent risk-weighted asset because it poses no credit or, counterparty risk.

Market participants have been listening closely for any hints that rules regarding capital requirements and liquidity buffers at banks will include a change for gold.