GENEVA - The Swiss National Bank has for the first time disclosed where it stashes its 1,040 tons of gold, saying almost a third is kept overseas, in Britain and Canada.
Swiss National Bank President Thomas Jordan told an annual shareholders' meeting on Friday that 70 per cent of the reserves are stored in Switzerland, 20 per cent with the Bank of England and 10 per cent with the Bank of Canada. He rejected the notion that the central bank be required to repatriate the gold or increase its total reserves.
Since World War II and the Cold War, several central banks in Europe have kept part of their gold reserves in foreign countries in case of land invasions. But the turmoil in financial markets in recent years has raised some concern among Europeans about their country's financial safety nets. Some see gold as a reliable store of value that a country can depend upon in case of serious market turmoil.
A week ago, the Swiss Cabinet announced that the nationalist Swiss People's Party had gathered enough signatures to force a referendum that would ban the central bank from selling off any gold reserves or storing them abroad.
In his speech in the capital, Bern, Jordan said he had agreed to disclose details on the reserves because "there has been a growing need for transparency in our population in the last few years."
A major part of Jordan's speech was devoted to discussing the referendum initiative. He was critical of the proposal to ban gold sales, noting that would not guarantee price stability or improve the nation's emergency preparedness.
"We share the objectives the initiators put forward, such as maintaining currency and price stability and ensuring both the SNB's capacity to act and its independence," Jordan said. "However, the measures proposed to this effect are not suitable; in fact, they are even counterproductive."
The party's initiative, known as "Save Our Swiss Gold," would go to a vote among Swiss citizens within the next few years. It would require Switzerland's central bank to keep at least 20 per cent of its assets in gold, and all of those on Swiss soil.
As of the start of 2013, just over 10 per cent of the central bank's nearly 500 billion Swiss francs ($537 billion) in assets were gold.
Jordan said the bank has never ruled out making future gold purchases, but having a high proportion of its assets in gold would increase its balance sheet risk. That would likely reduce the central bank's profits, which are passed on to the federal government and each of the nation's 26 cantons (states).
Keeping some of the gold reserves abroad, he said, "ensures that the SNB can in fact access its gold reserves, especially in an emergency."