China stake in London gold vault


gold bars

Located in an undisclosed section within London is Europe's biggest and heavily protected gold vault. Its security is the best in the world and known to investment circles as the mini version for Fort Knox. Its roof is secured by electrified currents that can hold back all forms of assault and thievery. It has blast doors able to withstand grenades that are of military grade and with the firepower of a rocket launcher. It has state of the art fingerprint sensors able to detect blood flows within your veins and body system. The gold vault once belonged to Barclays who was the rightful owner of the vault for 4 years.

For a period, ownership of the vault was transferred to the overseas representatives for China's ICBC Standard bank in 2016. The vault has a storage capacity of $80 billion worth of gold bullions. Barclays handed over the keys after conclusion of the deal. None of the terms, pricing arrangements and deal details were disclosed to the public and remain a closely held secret. It is within Barclays strategy to slowly offload assets related to the commodities business in order to focus on its core commercial banking activities.
ICBC Bank, the Chinese national bank sought to purchase the facility in order to facilitate expansion plans and reach to the heart of London. Their aim is to solidify its status and force as a main price setter for various rare earths commodities right from gold up to nickel. London has long been the traditional gateway for trading gold bullion and has remained as the capital for hundreds of years. The physical trading for precious metals hub will remain in London despite rumors speculating the shift in demand to eastern world. Precious metals investors' number one concern is safety of their physical gold under their name, as commented by former executive for Barclays commodities section. London is the prime place for gold storage which offers highest safety and ease of mind.
There has been more than $5 trillion worth of transacted gold volume cleared in London alone, with increasing volume year on year over past years. ICBC officially became part member for e-clearing system mainly in the precious metals trade located in London, one of the first new member since 2005. ICBC Standard commodities head Mr Mark Buncombe commented that gaining membership status will spur better execution of the bank in the precious metals trading market. London has been the main physical gold trade clearing hub. However, China became the globally largest gold consumer, surpassing India who long held the pole position. Shanghai Gold Exchanges recently launched a brand new benchmark pricing to go head to head with London Gold Price standard.
Many western banks were cutting back on commodities trading business segment due to increased regulatory burden from various banking regulators since the global financial crisis. Barclays had once been fined 26 million pounds about 2 year back by UK financial authority due to manipulation of gold bullion price setting mechanism by one rogue trader. It is a serious manipulation due to the widespread reliance on the price by parties ranging from established banks to jewelers in the gold trade.
A complete overhaul was made to the 100 year old gold price setting system and transition was made to the digital world. UK regulatory bodies now heavily regulate the gold and silver pricing benchmarks. Barclays has been mulling a potential sale for the precious metals enterprise segment and are evaluating proposals from multiple fronts. It is no longer a potential viable profit generating business segment and Barclays will be willing to offload the businesses should an attractive offer come by.
ICBC Standard Bank is a leading financial markets and commodities bank that benefits from its unique Chinese and African parentage. We provide a strategic global markets position and an unparalleled level of expertise.  Headquartered in London, ICBC Standard Bank Plc also has operations in Dubai, Hong Kong, Shanghai, Singapore, New York, and Tokyo.

On 1 February 2015, Industrial and Commercial Bank of China Limited (ICBC) acquired a controlling stake in Standard Bank's London-based Global Markets business. The acquisition included Standard Bank Plc, the Standard Bank Group's UK subsidiary and the primary legal entity in the UK, as well as other international operations. Standard Bank Plc was subsequently renamed ICBC Standard Bank Plc to incorporate the new parentage.

The union of ICBC and Standard Bank creates a platform to serve the growing demands of Chinese clients for global commodities, fixed income, currency and equities products while continuing as a distribution platform for African risk.
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