MTECHTIPS;-World Gold Council proposes Gold as collateral for EU debt

MTECHTIPS;-World Gold Council proposes Gold as collateral for EU debt

The World Gold Council on Thursday made available a paper by Europe Economics, on the use of Gold as collateral for Euro zone sovereign debt. The paper is written by Dr. Andrew Lilico.The paper assesses the council’s proposals on gold as collateral for Euro zone sovereign debt, especially in the case of Italy and Portugal, relative to current policies such as the Outright Monetary Transactions (OMT) scheme recently proposed by Mario Draghi.Europe Economics was commissioned by the World Gold Council to challenge and assess the merits of its proposals relative to other suggested monetary policy tools, such as the European Central Bank’s World Gold Council’s proposals state that Euro zone member States with significant gold holdings relative to their medium-term financing requirements (in particular Italy and Portugal) should consider gold as collateral for sovereign debt issuance to reduce bond yields.

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