by Ronan Manly, BullionStar:
It’s a common misconception that the world’s major central banks and monetary authorities own large quantities of gold bars. Most of them do not. Instead, this gold is owned by the sovereign states that have entrusted it to the respective nation’s central bank, and the central banks are merely acting as guardians of the gold. Tracing the ownership question a step further, what are sovereign states? A sovereign state is an entity with legal personality that is represented by one government. And with each government representing the people of that sovereign state, in essence, the large gold hordes managed by the central banks are in fact pools of gold owned by the state for the benefit of its citizens.
Owned by the State
When ownership of gold reserves resides with the associated sovereign state, the central bank or monetary authority is officially appointed to act on behalf of the state in holding and managing that state’s gold reserves.
For example, the Deutsche Bundesbank has stated that:
“The Deutsche Bundesbank holds and manages the national foreign reserves of the Federal Republic of Germany”
Likewise, as per its Statutes, the Banque de France highlights that it:
“shall hold and manage the State’s gold and currency reserves and shall enter them on the asset side of its balance sheet pursuant to the terms and conditions of an agreement it enters into with the State.”
The United Kingdom’s gold reserves are held in the Exchange Equalisation Account (EEA). The EEA is a “government account administered by Her Majesty’s Treasury (HMT)” which holds UK Government’s official international reserves, including its gold.
HMT is the UK government’s economic and finance ministry. According to the Bank of England, the Bank “acts as HMT’s Agent in the day-to-day management of the EEA” under an annual Service Level Agreement between HMT and the Bank.
The US Government Gold Reserves, officially claimed to consist of 8133.5 tonnes of gold, are held by the US Department of the Treasury. The US Mint, which administers the US gold reserves’ storage facilities, is a part of the US Treasury.
China’s official gold reserves are owned by the Chinese State and managed by the Chinese central bank, the People’s Bank of China (PBoC). One of the PBoC’s stated functions is:
“Holding and managing the state foreign exchange and gold reserves“
The Russian Federation’s central bank, the Bank of Russia, manages the official Russian gold reserves, however the Bank of Russia is under ownership of the Russian Federation:
“The authorised capital and other property of the Bank of Russia shall be in federal ownership. In pursuance of its purposes and in accordance with the procedure established by this Federal Law, the Bank of Russia shall exercise its powers to own, use and manage its property, including the gold and currency (international) reserves of the Bank of Russia”
The Russian State Fund of Precious Metals and Precious Stones, a.k.a The Gokhran, may also hold Russian gold reserves. However, it doesn’t report its investments to the public. The Gokhran too is under Russian state control, since the Gokhran reports to the Russian Ministry of Finance.
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