Subject : Consultation on the Units of Measurement Directive (80/181/EEC)
Please see the attached letter together with a submission from the LBMA on the Use of the Troy Ounce in
the Bullion Market.
Submission from the London Bullion Market Association
on the European Commission's Consultation
on the Units of Measurement Directive (80/181/EEC)
This document is submitted by the London Bullion Market Association (“LBMA”) in response to the Commission’s consultation document of December 2006 concerning the Units of Measurement Directive (80/181/EEC).
"...As mentioned, the US gold and silver markets also use the troy ounce, the main markets being exchange based (COMEX in New York and the CBOT in Chicago). Although they do operate a physical market, this tends to be domestic. Therefore, if business were to be diverted from London it is probably more likely to migrate to Switzerland rather than the U.S.A.
The Swiss market, although much smaller than the London market, is a physical market. Previously when the London market was closed temporarily in 1968 following the collapse of the Gold Pool, a lot of business was diverted to Switzerland and it took many years to win that business back. Over the years, the Zurich market has suffered from a combination of bank mergers and transfers of key functions to the London market but there are currently clear signs that the Swiss market is eager to compete with London again. Moreover, the London market until recently had two Good Delivery gold refiners but these have now closed whereas Switzerland has five active gold refiners. Consequently if the London Market were to suffer disruption and / or became less competitive, there is a real possibility that the business would flow to Switzerland to the detriment of the UK’s (and the EU’s) financial market earnings..."
[Mrt: A very important document, I posted it on Fofoa long time ago, now to here as well.]