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Firm With ‘Critical Mass’ Seen Running New Silver Price

The replacement for the 117-year-old London silver fixing benchmark that’s ending Aug. 14 will probably be chosen as soon as one of the companies proposing an alternative wins “critical mass” support from the market, according to the London Metal Exchange.

Garry Jones, the LME’s chief executive officer, and Matthew Chamberlain, head of business development, spoke at a news briefing at the bourse today. The LME, Autilla Ltd., Bloomberg LP, CME Group Inc./Thomson Reuters, ETF Securities Ltd., Intercontinental Exchange Inc. and Platts have made proposals.

Matthew Chamberlain:

London Bullion Market Association “members and market makers have to make the decision. Whether we see an official statement from the LBMA or not,” the market will decide “when one of the players gets critical mass,” he said.

“We do believe in a London market for silver.”

Garry Jones:

“It’s important to keep London the center for metals. Any firm that’s not selected for the silver fix could still start a silver market. Anyone can launch anything. People would be concerned with fragmenting liquidity. No bank would sign off on a system unless it’s been tested to death.

‘‘We wouldn’t set up an alternative reference price” if the LME isn’t selected, he said. “We are looking over time to launch new markets.”

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To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

To contact the editors responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net John Deane

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