German Court Demands Bundesbank Audit Sovereign Gold Holdings

Submitted by Tyler Durden on 10/22/2012 - 11:33 Bank of England Central Banks Federal Reserve Federal Reserve Bank Foreign Central Banks France Germany

The German court of auditors (Bundesrechnungshof) has demanded that the Bundesbank undertake an audit of its gold reserves. In an 'audit-the-fed' style effort, the court wants to ensure that the nearly 3400 tons of gold is in fact in existence - 'because stocks have never been checked for authenticity and weight'. Furthermore, the Bundesbank's gold is stored in three other vaults around the world: The Bank of England, The Bank of France, and the US Federal Reserve. The court questions the practice of relying on a written confirmation from the custodians (foreign central banks). The decision means negotiating with the three foreign central banks for physical verification but in anticipation, the Bundesbank has begun the process of shipping 50 tons per year from the Fed back to Germany for the next three years.