More Bad News for the LBMA Silver Price, but an Opportunity for Overhaul

Ronan ManlyPosted on 7 Mar 2017 by

News that Thomson Reuters and the CME intend to abandon ship as administrator and calculation agent of the LBMA Silver Price auction has raised more than a few eyebrows, especially since they appear to be linking the exit to the introduction of new European Benchmark Regulations. Whatever the reason for their departure mid-way through their service provision contract, it now provides a one-off opportunity for the global silver market to insist that the current scandal ridden current auction be scrapped and taken out of the hands of the bullion bank controlled London Bullion Market Association (LBMA). It is also an opportunity to introduce a proper silver price auction in its place that is structured to allow direct participation by hundreds of silver trading entities such as the world’s silver refiners and miners, an auction that employs central clearing to allow this wider participation, and an auction that is based on trading real physical silver and not the paper credits representing unallocated claims that the participating London bullion banks shunt around between themselves. This could help lead to real silver price discovery in the global silver market. The chances of this happening with the LBMA still involved in the process are nil. Continue reading…