In the 1980’s, bankruptcies were rampant, this brought up the name savings and loans crisis at that point in history. From 1950 to 1981, about six banks in the United States went bankrupt per year.
Due to the indelible bankruptcies of the major international banks, there grew low security among banks and consumers. To eradicate this risk, the Basel Committee on Banking Supervision (BCBS), composed of central banks and supervisory authorities of the G10 countries met in 1987 in Basel, Switzerland.
Basel 1 was a set of international banking complex systems that laid out the minimum capital requirements for financial institutions with the goal of minimizing credit risk and encouraging financial stability.
Basel 1 was seen as too simplistic and broad, and so was followed by Basel II, and finally III, and together as the Basel Accords.
The Basel III protocol escalated the minimum Basel III capital requirements for banks from 2% in Basel II to 4.5% of common equity, as a percentage of the bank’s risk-weighted assets. There is also an extra 2.5% buffer capital requirement that brings the total minimum requirement to 7% in order to be Basel compliant. Banks can use the buffer when they face financial stress, but using the buffer can lead to even more financial constraints when paying dividends.
Although this accord has been structured carefully and gradually as it has been improved upon from Basel 1, through to 2 and finally 3. The protocol has faced criticism and others see it as a failed system. Even with the last updated protocol, Basel III, The Institute of International Finance, a 450-member banking trade association in the United States, objected to the implementation of Basel III due to its potential to hurt banks and slow down economic growth. The study by OECD revealed that Basel III would likely decrease annual GDP growth by 0.05 to 0.15%.
Again, the American Bankers Association and a host of Democrats in the U.S. Congress stood against the application of Basel III, fearing that it would cripple small banks by increasing their capital holdings on mortgage and SME loans.
The new structure put in place for Basel III will reclassify Gold as a Tier 1 asset. This means gold will be treated the same as a currency deposit and is considered the safest type of asset a bank can hold. Gold is now considered the safest asset, and this is why Forex traders turn to Gold when market conditions are not favourable, they termed it as “safe heavens” The new accord, Basel III will force banks to charge higher interest rates to investors for holding unallocated gold, which will lower demand. The reduced profitability of such accounts may push many banks to abandon trading in the gold market altogether.
North American and European banks focus more on offering allocated gold accounts, creating a scramble for more physical gold bullion. The resulting liquidity squeeze would push gold prices much higher.
Gold is a precious thing that everyone sought for now. People are so much interested in Gold, not because of its investment purposes alone but also used in making jewellery and manufacturing high quality electrical and medical gadgets.
Rolaz Gold (rGLD) is the first asset issued by the Rolaz hedge fund, tokenizing the already operational gold mining operations. Rolaz Group is tokenizing its gold mining operations in order to provide a transparent and trustworthy platform for investors worldwide. rGLD will do away with all the blockages that are with the real-time gold investment, and make it accessible to the common people. This traditional hedge fund investment benefit offered by rGLD is a 50% APR promised return on investment (ROI) for staking rGLD.
Carlos Rodrigo — the Founder and CEO of the Rolaz Group
Carlos Rodrigo is an astute entrepreneur with many years of experience in different ventures.
In 2004, Carlos was the Co-founder of Icono Engineering Services, a pioneer in telecommunications engineering services.
In 2009, Carlos was a Partner and Business Director for Tag Creative Boutique — a company oriented to the development of ATL and BTL solutions. In the same year of 2009, Carlos was the Co-founder of Social Media LLC — a company in Bolivia offering digital advertisement services via social networks.
In the year of 2012, Carlos was the Co-founder of RR Industries — the development and implementation of food franchises.
Carlos acted as the Co-founder of Dedalo Engineering Services in the year 2013.
In 2014, Carlos was the founder of Ludi Entertainment LLC — an agency in charge of booking of concerts and events in South America.
Currently, Carlos is the founder and CEO of the Rolaz Group (2016), and the Rolaz Decentralized Hedge Fund (2018) — Blockchain-powered.