Belgium does not recall gold reserves from London after all

Last Wednesday Reported Belgian broadcaster RTBF said the country is planning to remove 200 tonnes of gold from London. A message that was published later in The Time was contradicted by Luc Coene, the governor of the Belgian central bank. In an interview with De Tijd, Coene denied the story about the repatriation of 200 tons of gold. He said that regular checks are carried out on the Belgian gold stored in London and that there are other methods to verify that the gold in London is indeed Belgium's.

Belgium refrains from withdrawing gold for the time being, because it would cost too much money, according to central bank governor Coene. He said that the Belgian central bank does not have the expertise to store and secure so much gold itself. The central bank currently pays around €250,000 a year for the storage of their gold reserves in London.

Repatriation of gold stocks

Due to increasing public pressure, the Belgian central bank started an investigation at the end of last year into the possibility of recovering part of the gold reserves. Its neighbours the Netherlands and Germany already recovered 120 and 130 tonnes of gold from abroad respectively in 2014.

During the Second World War, Belgium secured a large part of its gold reserves by shipping it to London. To this day, most of Belgium's gold reserve of 227 tonnes is still in London. There is also a small part with the Canadian central bank and the Bank for International Settlements.

According to Luc Coene, the risk is better spread if the gold is located in different locations. Also, according to him, it would not be much cheaper to keep all the goods in one place. It's hard to imagine that storage costs are actually the deciding factor. In that respect, gold is in any case a subordinate reserve to debt securities. What argues in favor of gold is that there is no counterparty risk. The central bank can remove that risk by bringing gold back to its own country.