jueves, 31 de enero de 2013

jueves, enero 31, 2013


Buba’s new era of openness on gold reserves

By Jack Farchy in London



The gold market barely shrugged when the Bundesbank announced it would move 674 tonnes of the stuff from Paris and New York to Frankfurt.


But the move is important: not for what it says about Germany’s faith in French or American vaults; nor for the cost of shifting 674 tonnes of gold; but because it is a major victory for transparency in the gold market.


Central banks are notoriously secretive about their gold trading activities.


Most report, on a monthly basis, their gold reserves to the International Monetary Fund. But these data fall a long way short of full transparency. They tell us nothing about derivative positions in the gold market – for example gold loans, agreements for future sales, or options transactions.


And they are open to the whims of whether individual countries decide to classify a chunk of gold as belonging to their “international reserves” or being held by some other state entity (a sovereign wealth fund, for example). Thus Saudi Arabia announced abruptly in 2010 that its reserves had more than doubled as the result of an accounting shift. And China a year earlier revealed a 550 tonne increase in its gold reserves – a buying programme that traders believe was carried out over several years, and has continued since.


In that context, it is not the Bundesbank’s decision to move its gold, but its decision to be more open about where it is located and how it has traded it in the past, that is most welcome.


In one document published on its website earlier this month, the Bundesbank lists, for example, each one of its gold transactions since 1951.

In another, it details how much gold it has held in each of New York, London, Ottawa, Paris, Bern, Frankfurt and Basel since 1951, and how much it was lending to the market at any one time.


This reveals the interesting titbit that the Bundesbank moved almost 1,000 tonnes from London in 2000 and 2001. It also shows that the German central bank halted all gold lending activity in 2008 when the financial crisis beganpresumably because of concerns about the credit risk of the banks it was lending to.


The historical lack of transparency among central banks is somewhat understandable.
 

With 29,500 tonnes between them (a decade of global mine supply) they have the ability to disrupt the market significantly if their trades are too public. See, for example, the reaction to the UK’s announcement that it would sell a large part of its reserves in 1999.


But there is a difference between revealing your trading strategies to the world and disclosing simple facts about your reserves – such as their quantity, where they are held, whether they have been lent or swapped, and so forth – with a delay if need be.


That the Bundesbank has been nudged into this new-found transparency must be chalked up as a victory for the groups of investorsmost prominent among them, the Gold Anti-Trust Action Committee, or Gata – that have for years been asking central banks to reveal their activities in the gold market.


If central banks wish to refute suggestions from such groups that their gold does not exist, or that they are scheming to manipulate prices, they could do worse than to follow the Bundesbank’s lead.

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