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To: paul ross who wrote (2201)	10/19/1999 10:13:00 AM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 3536

Paul, gold leases probably precede the 80s they just weren't as widely used so it probably just didn't garner as much attention. I guess I'm just a little resistant to the notion of someone 'fathering' leases. It is my opinion that these type of innovations arise more out of a communal process than some individual thinking it up on his or her own. Very often what happens is that someone has a client with a particular need. They take notice of some 'technique' that has been available to the markets for awhile and makes some refinement to fit that particular need. Having found something that works for one client they naturally start looking for other clients who might want to do the same transaction. Pretty quickly these clients start telling other trading partners that XYZ has solved their needs by such and such means. These folks start trying to figure ways to nose into the business, often by offering new variants on the transaction. The evolution is continuous. I have noticed a lot of people who seem to think of gold leases as synonymous with the gold carry trade. To me the gold carry is just a variant of the leases that combines techniques from two different markets. Given the above it always strikes me as difficult to assign 'fathering' credit. Who gets credit? the guy who thought up the original technique? the client who had the need? the guy who tinkered with the technique? the competitors who got involved and forced competition? There are usually to many people involved to figure out who did what. As to me, yes I was involved in the leases a while back and witnessed much of the recent innovation. But when I got involved there were a lot of old timers who had been doing leases a long time who thought I was just some rookie with a few clever ideas about interest rate risk management. So to answer your final question: I think the question here may have been more in regards to Euro CB's having some influence in the creation of the gold lease. Was the gold lease purely the development of the leasing agents, as it were, or was there any input from gold producers or anyone remotely related to the CB's ? Yes. There was and continues to be influence from lots of different sources as various participants try to find transactional structures to meet their particular need. There was a tremendous amount of two way information flow. These things develop organically, they are not the product of one mind that convinces everyone else to something. Henry