Reply To: Bank and Banking Services

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Rinku Das (Hazra)

Gold holdings by BANK OF ENGLAND

BANK OF ENGLAND only accept bars which comply with London Bullion Market AssociationOpens in a new window (LBMA) London Good Delivery (LGD) standards. LGD bars must meet a certain minimum fineness and weight. A typical gold bar weighs around 400 troy ounces (12.4kg).

The LBMA invites the Bank to observe discussions at its Board which are relevant to the Bank’s custodial function. The Bank is not a member of the LBMA nor its board and has no regulatory responsibilities for the gold market. Its role is limited to matters affecting its gold custodial responsibilities. To support its role, the Bank also observes at the LBMA’s Physical Committee and attends its working group.

Why does the Bank of England store gold?

Gold is an important asset of foreign exchange reserves. By providing safe gold custody we are supporting central bank reserve management and thus international financial stability.

London is the global centre for gold trading.BANK OF ENGLAND support financial stability by providing central banks with access to the liquidity of the London gold market. We also provide gold accounts to certain commercial firms that facilitate access for central banks to the London gold market.

Gold that BE hold on behalf of THEIR customers does not appear on BE balance sheet. This is because BE provide gold storage on an allocated basis, meaning that the customer retains the title to specific gold bars in BE vaults, rather than a claim on the Bank for a certain weight of gold.