Germany calls home 674 tons of gold in a high-security operation spread over 8 years:
FRANKFURT, Germany — Germany’s central bank is hauling home tens of thousands of gold bars currently stored in the United States and France, in a high-security operation spread over eight years.
All 374 tons of German gold held in Paris vaults will be moved back to the Bundesbank’s vaults in Frankfurt by 2020, the bank said Wednesday. A further 300 tons of gold stored in New York will also be brought back.
In total, the shipments are worth US$36 billion at current market prices and represent about 19% of Germany’s gold reserves — the world’s second-largest after the United States’.
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But don’t expect the Bundesbank to reveal how it’s going to keep the valuable cargo safe on its way back to Germany — especially after the stunning raid of a Berlin bank earlier this week in which burglars tunneled 30 metres to reach the safety deposit room.
“For security reasons we can’t discuss that, partly to protect the gold, partly to protect the staff that will be carrying out the transfer,” said spokesman Moritz August Raasch.
“But of course since we transport large sums of money around Germany every day, we’ve got a certain amount of experience with this.”
During the Cold War, Germany kept most of its gold abroad for fear it could fall into the hands of the Soviet Union if the country was invaded. Another reason was that it’s easier to swap the reserves for foreign currency in London, Paris and New York, where gold is traded.
The move follows criticism last year from Germany’s independent Federal Auditors’ Office, which concluded that the central bank failed to properly oversee its gold. The auditor suggested the central bank should carry out regular inspections of the gold held abroad.
The auditors’ report stunned Germany, where the Bundesbank routinely tops polls of the nation’s most trusted institutions.
“With this new storage plan, the Bundesbank is focusing 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 centers abroad within a short space of time,” the Bundesbank said. It said the complete withdrawal of reserves from Paris reflects the fact that Germany no longer depends on France as a financial center to exchange gold because both nations use the euro.
Germany’s Audit Court sparked a debate about the country’s gold reserves last year when it called on the Bundesbank to take stock of its holdings abroad, saying their existence had never been verified. German gold reserves, the second-largest in the world after the U.S., amounted to 3,391 tons as of Dec. 31 and were valued at 137.5 billion euros.
‘A Lot of Emotion’
“In Germany, a lot of emotion is attached to the topic of gold reserves,” Bundesbank board member Carl-Ludwig Thiele said at a press conference in Frankfurt. “The Bundesbank has managed the gold reserves with great caution and will continue to do so.”
The Bundesbank isn’t taking any chances should anything happen to the gold on its way back to Frankfurt.
“Of course the transports are insured,” Raasch told The Associated Press.
With files from Bloomberg.com
