Foreign banks in China could face curbs if they snub gold benchmark
By A. Ananthalakshmi
Tuesday, January 5, 2015
China has warned foreign banks it could curb their operations in the world's biggest bullion market if they refuse to participate in the planned launch of a yuan-denominated benchmark price for the metal, sources said.
The world's top producer and consumer of gold has been pushing to be a price-setter for bullion as part of a broader drive to boost its influence on global markets.
Derived from a contract to be traded on the state-run Shanghai Gold Exchange, the Chinese benchmark is set to launch in April, potentially denting the relevance of the current global standard, the U.S. dollar-denominated London price.
China needs the support of foreign banks, especially those that import gold into the mainland, but they could be wary given the global scrutiny on benchmarks following the manipulation of Libor rates in the foreign exchange market.
Banks with import licenses will face "some action" if they do not participate in the benchmark, said a source who did not want to be named as he was not authorized to speak to media. ...
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