Question
Are gold bullion coins included in the term ‘gold bullion’ as used in Article 134(4)?
Background on the question
Depending on whether or not so called gold bullion coins are included the risk weighting attributed to these may be zero or 100 per cent.
Answer
For the purposes of article 134 CRR gold bullion could include coins commonly accepted by the bullion markets, as the value of bullion is typically determined by the value of its gold content, which is defined by its purity and mass. Gold coins may be included provided that their value is determined as for other forms of gold such as bars and ingots, for which a liquid market exists. This excludes coins valued on the basis of their numismatic interest rather than their gold content, which means that only coins sold at a price which does not exceed the open market value of the gold contained in the coins may receive a 0% RW.