Bundesbank Disagrees With Audit Court’s View on Gold Reserves

The Bundesbank disagrees with Germany’s Audit Court that the central bank should take stock of its gold holdings outside Germany.

“The Bundesbank and the Federal Court of Auditors have different opinions” on the matter, the Frankfurt-based Bundesbank said in a statement posted on its website today. The foreign central banks that hold gold on the Bundesbank’s behalf verify the holdings annually and “there are no doubts about the integrity, reputation and safety of these foreign depositories,” it said.

The Bundesbank manages Germany’s gold reserves, which amounted to 3,396 tons as of Dec. 21, 2011. The gold hoard is kept at central bank vaults in Frankfurt, New York, Paris and London. The Federal Court of Auditors yesterday called on the Bundesbank to physically take stock of its gold holdings outside Germany because “they’ve never been assessed.”

The court said the Bundesbank has started to act on its recommendation to negotiate with the three foreign central banks for the right to physically verify the stocks. Germany’s central bank has agreed to transfer 150 tons of its gold from the U.S. to Germany over the next three years, where it will undergo “thorough examination,” the court said.

“Despite our different view of the law, the Bundesbank will, where possible, take up the audit court’s suggestions,” the Bundesbank said today.

The Audit Court can only give recommendations and can't legally force the Bundesbank to act, a spokesman for the Bonn-based court said.

To contact the reporter on this story: Stefan Riecher in Frankfurt at sriecher@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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