{"id":55495,"date":"2026-03-02T17:00:00","date_gmt":"2026-03-02T16:00:00","guid":{"rendered":"https:\/\/www.11onze.cat\/?p=55495"},"modified":"2026-03-02T11:34:08","modified_gmt":"2026-03-02T10:34:08","slug":"basel-myth-paper-gold","status":"publish","type":"post","link":"https:\/\/www.11onze.cat\/en\/magazine\/basel-myth-paper-gold\/","title":{"rendered":"Basel III and the myth of \u201cpaper gold\u201d"},"content":{"rendered":"
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While media attention swings with the price of gold and silver, another battle is being fought in silence. It does not appear in candlestick charts nor fuel crypto euphoria. It is decided in technical committees, in regulatory annexes, and in acronyms that seem innocuous.<\/b><\/h3>\n

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There are no promises of explosive returns here. There are ratios. There is fine print. And there is a concept that may sound dull, but explains a great deal: the Net Stable Funding Ratio (NSFR). Because <\/span>when regulation pulls the lever of bank funding, the market adapts<\/b> \u2014 often faster than it seems.<\/span><\/p>\n

When Basel is mentioned, many people picture the beautiful Swiss city with fond football memories for some. Yet the city of Basel does not exercise global executive power. That role belongs to <\/span>the Bank for International Settlements (BIS) \u2014 headquartered there \u2014 which designs prudential standards<\/b>. In fact, the BIS develops recommendations that each jurisdiction later adapts \u2014 or nuances \u2014 according to its political and economic pace.<\/span><\/p>\n

This is the first point often distorted in viral narratives: <\/span>a global standard is not a worldwide decree that enters into force simultaneously<\/b>. Financial regulation does not operate with switches, but rather with timelines, interpretations and national adaptations.<\/span><\/p>\n

And it is precisely in this technical terrain, far from the noise, <\/span>that a significant part of the future of \u201cpaper gold\u201d is being decided<\/b>.<\/span><\/p>\n

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NSFR: the rule that penalizes short-term funding<\/b><\/h3>\n

In the United States, when discussing the \u201cBasel III Endgame,\u201d <\/span>the debate mainly focuses on capital and risk weightings for large institutions<\/b>. But the timeline is not homogeneous, and regulatory development is subject to political tensions and pressure from the financial sector.<\/span><\/p>\n

Regulation is not a switch turned on overnight. It is a mosaic of technical decisions, <\/span>national adaptations and power balances<\/b>. And within that mosaic, the key piece directly affecting the metals market is the Net Stable Funding Ratio (NSFR).<\/span><\/p>\n

In plain language, <\/span>the NSFR seeks to prevent banks from funding long-term or less liquid assets with volatile, short-term money<\/b>. It is a lesson learned in 2008, when the problem was not only asset quality but funding fragility. And this is where gold enters the picture.<\/span><\/p>\n

According to the <\/span>World Gold Council<\/span><\/a>, <\/span>certain gold exposures on balance sheets may require 85% Required Stable Funding in the ratio calculation. In other words<\/b>: maintaining certain gold positions requires stable funding \u2014 and stable funding has a cost.<\/span><\/p>\n

This does not prohibit gold, but it changes its economics. If certain \u201cpaper metal\u201d operations were previously efficient because funding was cheap, <\/span>they may now be less attractive from a regulatory standpoint<\/b>.<\/span><\/p>\n

And here lies the real debate: allocated gold \u2014 identified bars with clear ownership \u2014 versus unallocated gold \u2014 a credit claim against an institution. <\/span>The difference is not ideological, it is structural<\/b>. When a rule such as the NSFR makes maturity transformation more expensive, the system tends to reward what is more transparent and less dependent on funding leverage. Regulation does not destroy a practice overnight, but it does modify incentives. And when incentives change, markets change.<\/span><\/p>\n

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The mirage of \u201cTier 1\u201d<\/b><\/h3>\n

One of the most recurrent traps in this debate is the idea that \u201cgold becomes Tier 1 like cash or Treasuries.\u201d The phrase is striking but technically imprecise. Here, three boxes that are often deliberately mixed must be separated:<\/span><\/p>\n