Chinese Banks Want to Set The Price of Silver

The London Bullion Market Association (LBMA) began using its new electronic price-setting mechanism for London’s precious metals market back in August, with an algorithm setting the benchmark price for silver. Chinese banks now want to become involved.

So far but five participants have signed up for the new process, with JPMorgan Chase signing up on Monday of the past week. This LBMA silver pricing replaces the old style closed teleconference run by member banks which has been chastised for its secretive nature.

Ruth Crowell, chief executive of the LBMA, told Financial Times that several Chinese banks are interested.

“It will take some time from a controls perspective for them [Chinese banks] to get where they need to be. But I would imagine they will look to do both gold and silver simultaneously,” said Mrs Crowell. “It will make the London market that much more international.”

This coming from a western metals industry that has had several lawsuits filed against it for apparent precious metals manipulation.

“Ultimately you have the experience and perspective here in London, particularly from a physical vaulting perspective, and it would be very difficult to unsettle that,” said Mrs Crowell. “There’s an advantage to having the metal here if you ever want to sell it in times of stress,” she said.

For now, the City of London has the respect of the investment community.

“For the large institutional investor, London still holds good – I don’t see metal flooding out of London,” said Ross Norma, chief executive of Sharps Pixley, a London-based bullion dealer.
“It’s not a case of Asia winning at London’s expense, it’s a case of enriching the market by giving banks more access to more clients,” he said.

http://www.ft.com/intl/cms/s/0/d23d743e-52f5-11e4-b917-00144feab7de.html#axzz3GRkkaQUG

Litigation is ongoing against Deutsche Bank, Bank of Nova Scotia and HSBC Plc for allegedly fixing the price of silver. The lawsuits have been coming in since July and they are still flooding in.

http://www.resourceinvestor.com/2014/10/15/a-secret-scheme-to-manipulate-silver-prices/Users/Mal/Pictures/iPhoto Library.photolibrary/Masters/2014/10/17/20141017-200315/GP022141.MP4

To be sure it is not only the silver setting Chinese banks wish to have a say in, but gold as well. In recent years China has made headlines by breaking the bank to stock up on gold reserves, surpassing India earlier this year as the number one holder of gold.