bundesbank to bring home gold reserves
Last Updated : GMT 07:48:56
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Bundesbank to bring home gold reserves

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Arab Today, arab today Bundesbank to bring home gold reserves

Washington - AFP

The Bundesbank has decided to bring home to Germany some of its huge piles of gold ingots stashed away in the United States and France, it said on Wednesday after accusations that it has not kept proper track of the reserves. During the Cold War, the German central bank, which with nearly 3,400 tonnes has the world\'s second biggest gold reserves after the US Federal Reserve, stored most of the ingots outside the country in case of a Soviet invasion. Up until unification in 1990, 98 percent of the Bundesbank\'s gold reserves were stored outside the country. Nevertheless, since the fall of the Iron Curtain, the Bundesbank has already repatriated some 900 tonnes it had given to the Bank of England for safekeeping.And now under a new storage plan unveiled by the central bank on Wednesday, it will also ship back home all 374 tonnes it had stored with the Banque de France in Paris, as well as 300 tonnes -- or just under one fifth of a stockpile currently guarded by the US Federal Reserve. That meant that proportion of gold stored in the Bundesbank\'s own vaults in Frankfurt will increase from 31 percent to 50 percent by 2020, board member Carl-Ludwig Thiele told a news conference. The increase has become possible thanks to additional capacity becoming available in the Bundesbank\'s own vaults, Thiele argued. The shift will enable the central bank to \"focus on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centres abroad within a short space of time,\" Thiele explained. All of the reserves held in France would be moved back home, he said. The reason for this was that, since both France and Germany shared the euro as their national currency, the Bundesbank was \"no longer dependent on Paris as a financial centre in which to exchange gold for an international reserve currency should the need arise,\" Thiele explained.-- \"High security\" -- The Bundesbank gave no indication as to when and how the transfers would take place, but Thiele insisted the central bank had \"huge experience\" in handling such high-security transports. Thiele insisted the decision represented no diplomatic slight to France and the Bank of France \"remains an important partner, whom we thank for taking care of our gold.\" In future, the US Federal Reserve would continue to guard 37 percent of the Bundesbank\'s gold reserves and the Bank of England 13 percent. Even though Thiele insisted the Bundesbank had taken the decision in full independence, it did come after the central bank locked horns with the federal court of auditors or Bundesrechnungshof last October over criticisms it was not keeping proper track of its vast reserves of gold. At the time, the Bundesrechnungshof, which audits Germany\'s finances, complained that the Bundesbank had never made sure that large parts of its gold reserves held by foreign central banks were subject to regular on-the-spot checks.In view of the high value of the gold reserves stored with foreign central banks and the fact that these have never been registered, the court of auditors views it as essential for regular physical checks and assays to be carried out at the foreign central banks,\" the letter stated. The Bundesbank retorted that it was \"not usual practice between central banks\" to carry out checks to verify its gold reserves were all present and correct. \"There is no doubt about the integrity, reputation and security\" of the foreign central banks\' depositary facilities and the Bundesbank received certified confirmation of its inventory down to the nearest troy ounce every year from the central banks concerned, it said. Nevertheless, public pressure and increasingly vocal euroscepticism in the wake of the debt crisis has increased for the bank to keep a closer track on its gold.

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