Despite years of central bank support and headline-making bailouts, private commercial banks face a myriad of operational and structural risks.
The Derivatives Market— A Ticking Time-Bomb
Forefront among these risks is bank exposure to a now irrationally over-valued derivatives market. The notional value of this market is likely greater than a quadrillion-dollars. Banks face massive counter-party and concentration risk in this inflated sector.
Holding Gold in Banks Invites Counter-Party Risk
Investors bracing for any and all macro eventualities recognise that holding physical gold within such banks (or ETF “paper gold” held at these institutions) invites far too much operational and counter-party risk.
Physical gold held in the banking system, even in segregated or specially allocated accounts, is vulnerable to inherent counter-party risk. In the event banks or their intermediary custodians or managers ever experience illiquidity or other structural failure, client gold is compromised.
In such circumstances, investors would find themselves standing in line as second priority holders rather than direct owners of their own precious metal assets.
Direct Solutions Through Direct Ownership
At MAM, our investors enjoy direct and unencumbered ownership of their assets with significantly reduced counter-party risk. This is a critical component of our long-term risk management, client-focused philosophy.
Such direct ownership sets us far above other precious metal service providers.