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Historic silver price benchmark bites the dust as banks pull out

Wednesday, May 14th

SINGAPORE/LONDON, May 14 (Reuters) - The 117-year old London silver price benchmark - or fix - will cease on Aug. 14, its operator said, as regulatory scrutiny of price-setting intensifies across markets.

The fix is set once a day by banks getting together via telephone to work out a price, based on deals between their clients. It is used by producers, consumers and investors who use it to base contracts on.

The announcement by the London Silver Market Fixing Ltd on Wednesday left a question mark over the role of a benchmark, which could be replaced an electronic alternative.

The London Bullion Market Association (LBMA) said it had launched a consultation among market participants "to try and ensure that there is something that replaces the silver fix."

"We don't have a lot of time until August 14," a spokesman said. "We will be talking to people who can help administer."

The LBMA said it will approach miners and users of the benchmarks, regulators and potential administrators requesting feedback.

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