Whereas some central banks have become more forthcoming on where they
claim their official gold reserves are stored (see my recent blog post ‘Central
bank gold at the Bank of England‘), many of the world’s central banks
remain secretive in this regard, with some central bank staff saying that they
are not allowed to provide this information, and some central banks just
ignoring the question when asked.
In the ‘Central bank gold at the Bank of England’ article, I said that “A
number of central banks refuse to confirm the location of their gold reserves.
I will document this in a future posting.” As promised, this blog
post explains what I meant by the above statement.
Some of those central banks may have made it into the Bank of England
storage list if they had been more transparent in providing gold storage
information. However, since they weren’t transparent, these banks make it
into the alternative ‘non-cooperative’ list. One subset of this list is
central banks, which to be fair to them, did actually respond and said that
they cannot divulge gold storage information. The other subset is central
banks which didn’t reply at all when I asked them about their official gold
storage location details.
The below list, although not complete, highlights 7 central banks and 1
official sector financial institution (the BIS), which, when asked where do
they store their gold reserves, responded with various similar phrases saying
that they could not provide this information. Between them, these 7 central
banks claim to hold 1,500 tonnes of gold. Adding in the BIS which represents
another 900 tonnes, in total that’s 2,400 tonnes of gold where the central
banks in charge of that gold will not provide any information as to its
whereabouts. Much of this 2,400 tonnes is no doubt stored (at least in name)
at the FRBNY and the Bank of England, with some stored in the home countries
of some of the central banks.
I have included the 8 responses below, but have deleted any references to
individuals’ names or email addresses:
Bank of Japan: 765.2 tonnes of gold
Bank for International Settlements (BIS): > 900 tonnes of gold
- BIS manages 443 tonnes of gold under custody for central
banks
- BIS owns 108 tonnes of gold itself
- BIS manages 356 tonnes of gold deposits from
central banks
- BIS has 47 tonnes of gold swaps outstanding
Spain: 281.6 tonnes of gold
South Africa: 125.2 tonnes of gold
Thailand: 152.4 tonnes of gold
Singapore: 127.4 tonnes of gold
Malaysia: 37.9 tonnes of gold
Paraguay: 8.2 tonnes of gold
…which translates into English as …..”That information is classified
and cannot be disclosed. I hope you understand“.
‘No Answer’ central banks
I also emailed some central banks which didn’t respond to the question,
‘where are your gold reserves stored?’. They may not have responded for
various reasons, including the emails may not have reached the relevant
people who would normally be responsible for such matters. These banks
account for another 500+ tonnes of gold reserves. Again, some of this gold is
probably at the Bank of England, such as, some of Jordan’s and Kuwait’s gold,
due to historical ties with the Bank of England.
- Banque du Liban (Lebanon): 286.8 tonnes (said to
be in Lebanon and FRB New York)
- National Bank of Kazakhstan: 208.1 tonnes
- Central Bank of Kuwait: 79 tonnes
- Central Bank of Jordan: 34.2 tonnes
- Bank Al-Maghrib (Morocco): 22.1 tonnes
- National Bank of Cambodia: 12.4 tonnes
BIS – Transparency in name only
The following slide, from a 2007
Bank for International Settlements presentation, shows how ridiculous the
claims of central banks are when they use the meme that they are transparent
and accountable, when in fact, they are nothing of the sort.
The BIS’ response above on the gold storage question, i.e. “the
information that you have requested is not made publicly available”
makes a mockery of its own claims in the below slide that central banks are
required to be transparent and accountable.
The only ‘gold’ that the BIS is willing to discuss is its pie-in-the-sky
corporate-speak ‘Golden Triangle’ of central bank Autonomy complimented
by Transparency and Accountability when it states:
– TRANSPARENCY – important for holding central bank to account
- ACCOUNTABILITY – crucial counterpart of autonomy in an open society,
makes transparency more credible
(I added the 2 red arrows to the slide to highlight these points)
Conclusion: Finland’s change of heart
The fact that staff of some central banks won’t discuss that bank’s gold
storage arrangements is no doubt an internal rule, or a storage depository
rule, or some such nonsense. The nonsensical nature of their non-cooperation
and evasion is highlighted by the below about-turn from the Bank of Finland,
when in January 2013 it childishly told me that “We are not allowed to
tell the exact depository, town or country“, and then 9 months
later in October 2013, the powers-that-be at the gold depositories gave the
go-ahead, for the Bank of Finland then spilled the beans, squealing that its
gold was stored at a cornucopia of the usual suspects, namely, the Bank
of England, the Federal Reserve Bank of New York, the Swiss National Bank,
and smaller amounts at the Swedish Riksbank and the Bank of Finland.
Given that the Bank of England, the Federal Reserve Bank of New York, and
the Swiss National Bank all agreed to the Bank of Finland’s request in 2013
to publish the individual storage locations of its gold, and given that the
vaults of these 3 banks store the vast majority of internationally stored
central bank gold, therefore it also makes a mockery of central banks which
persists in claiming that they cannot divulge information on the storage of
their own gold, which in most cases is supposedly spread between the very
same 3 sets of vaults.
And after the Bank of Finland press release, which most Finns and most of
the world probably didn’t even see, Helsinki and the world continued about
its business as before. The point being that the storage locations of central
banks’ gold reserves is not that big of a deal. Its only the central banks
that make it into a big deal with their secrecy….unless of course, they are
hiding something bigger, and the gold is not even where its supposed to
be.
Bank of Finland – 31 January 2013
Bank of Finland – 25 October 2013
Ronan Manly
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