Friday

26th Aug 2016

Germany to bring gold reserves back home

  • Thirteen percent of German gold is in London (Photo: bankofengland.co.uk)

Germany, the world's second largest holder of gold reserves after the US, on Wednesday (16 January) decided to repatriate part of its gold bars stored in New York and all of those kept in Paris by 2020.

"The German Bundesbank from 2020 on will store half of the German gold reserves in its own vaults inside the country. The other half will stay with partner central banks in New York and London," the Bundesbank said in a press release.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

Currently, the Frankfurt-based central bank only holds 31 percent of the more than 3,391 tonnes of gold which Germany owns, worth €137.5 billion. The rest is stored in New York (45%), London (13%) and Paris (11%).

The Bundesbank made clear that the move from Paris is not some kind of snub, but is instead linked to the fact that both countries have the same currency, the euro, so that the main reason for storing gold abroad - quick access to a foreign currency in case of crisis - is no longer valid.

The transport of 300 tonnes of the precious metal from New York and 374 tonnes from Paris will be done "gradually," with the Bundesbank keeping the dates of the shipments secret.

Its strategy to acquire gold abroad and store it there was developed during the Cold War, when West Germany feared possible invasion by the Russians. Before German reunification, 98 percent of its gold was in foreign vaults.

In choosing the locations abroad, the Bundesbank considers three criteria: central banks with the best international reputation, stable democratic structures in the host country and very high security standards.

Last October, when hurricane Sandy was rampaging along the US west coast, the Federal reserve was quick to say that its vault in New York, where Germany's and other countries' gold reserves are stored, is safe. "The bank's security arrangements are so trusted by depositors that few have ever asked to examine their gold," it noted.

The same month, he German court of auditors complained that many of the gold bars have never been checked by independent experts to see if they are genuine and to check how much they really weigh.

A member of the Bundesbank board, Carl-Ludwig Thiele, who presented the decision on Wednesday, told reporters the move is "independent" of the auditors' report.

"In Germany, a lot of emotion is attached to the topic of gold reserves. To hold gold as a central bank creates confidence," he said.

News in Brief

  1. Greeks paid €1bn more in taxes in June
  2. Greek minister denounces EU letter on former statistics chief
  3. Turks seeking asylum in Greece may cause diplomatic row
  4. Merkel becomes digital resident of Estonia
  5. Report: VW will compensate US dealers with €1bln
  6. EU mulls making Google pay news media for content
  7. Sweden to name new EU ambassador
  8. Deutsche Boerse and LSE request EU merger approval

Stakeholders' Highlights

  1. HuaweiSeeds for the Future Programme to Bring Students from 50 countries to China for Much-Needed ICT Training
  2. EFASpain is not a democratic state. EFA expresses its solidarity to Arnaldo Otegi and EH Bildu
  3. UNICEFBoko Haram Violence in Lake Chad Region Leaves Children Displaced and Trapped
  4. HuaweiMaking Cities Smarter and Safer
  5. GoogleHow Google Makes Connections More Secure For Users
  6. EGBAThe EU Court of Justice Confirms the Application of Proportionality in Assessing Gambling Laws
  7. World VisionThe EU and Member States Must Not Use Overseas Aid for Promoting EU Interests
  8. Dialogue PlatformInterview: "There is a witch hunt against the Gulen Movement in Turkey"
  9. ACCAACCA Calls for ‘Future Looking’ Integrated Reporting Culture With IIRC and IAAER
  10. EURidNominate Your Favourite .eu or .ею Website for the .EU Web Awards 2016 Today!
  11. Dialogue PlatformAn Interview on Gulen Movement & Recent Coup Attempt in Turkey
  12. Counter BalanceThe Trans Adriatic Pipeline: An Opportunity or a Scam in the Making for Albania?