Dutch watchdog says emergency role of €70bn gold reserve is unclear

The Dutch Court of Audit says it is unclear how the Netherlands’ 612-tonne gold reserve could be used in an emergency, because the central bank has made no arrangements with the finance minister for such a situation.

The reserve is now worth more than €70 billion, having increased in value sevenfold since 2010, according to the report. De Nederlandsche Bank (DNB) has described the gold as a potential “savings pot for emergencies” such as a financial crisis or war, when money or shares might lose value.

The Court says gold could act as an “anchor of confidence” without being sold. Another option would be for DNB to sell some of it during a crisis and transfer the proceeds to the state. But no agreement has been made with Finance Minister Eelco Heinen on what role the gold should play.

The watchdog also questions how closely Heinen oversees the reserve. As DNB’s shareholder, he can ask questions about it, but rarely does so. The minister considers that consistent with his shareholder role and the central bank’s independence, the Court says. It notes, however, that the Finance Ministry itself regards gold management as a vital state interest.

The report says Heinen does not know how checks are carried out to confirm that the gold remains secure. DNB also relies partly on confirmation from foreign central banks.

During the audit, DNB moved some of the reserve from the United States and Canada to London. The Court of Audit delayed publishing its report at the Finance Ministry’s request.