If gold is redefined as a Tier I asset, then when any future loss of asset value of paper assets occurs, there will be no need for banks to sell gold to compensate for such falls. And, as gold has amply demonstrated, the gold price is more than likely to rise in such situations, proving to be a `counter to all paper assets' on the bank's balance sheets.

Such a change will do a great deal to remove a shock to the solvency of so many commercial banks in credit crunches and the like. Will the change happen? We believe so and expect this to take effect on January 1st 2013.

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