Over £9 billion of bullion moved during central bank reconstruction
Steve Ward, News Editor
7 Oct 2020, 3:26 p.m.
For a central bank holding billions in your nations reserves, a building renovation presents additional challenges far and above the norm. De Nederlandsche – central bank to the Netherlands – is currently in the process of renovating it’s 50-year-old building, while also constructing a new vault to handle their gold and cash reserves.
Across the space of two days, in a massive, high security operation, De Nederlandsche Bank moved 14,000 gold bars and about 1,000 boxes of gold coins to a temporary vault. The consignments were heavily guarded by armed Royal Dutch Military Police with overhead helicopters flying in support.
Royal Marechaussee at The Dutch Bank, Amsterdam in 2018.
The move is just part of a major infrastructure and building reconstruction programme by De Nederlandsche Bank NV (DNB). The bank was founded in 1814 and became part of the European System of Central Banks (ESCB) in 1998.
The bank's reconstruction programme is being overseen by its president Dr. Klaas Knot. He is a member of the Governing Council of the European Central Bank and on the Board of Governors of the International Monetary Fund.
The programme means that its gold and valuables have been moved from Amsterdam and temporarily stored in vaults in nearby Haarlem. Eventually the bank's precious metal will go to new vaults in a Cash Centre that are currently under construction in the central town of Zeist.
According to De Nederlandsche Bank, the bullion was originally planned to remain at the bank while renovations took place, and the Cash Centre constructed. By removing the gold early however, the bank has estimated that it will complete renovations a year earlier, and the building is expected to be completed and accessible to the public by 2023.
The bullion, which is worth €10 billion, is just part of the bank's precious metal reserves. The remaining reserves are deposited in Canadian, US and British vaults. Accompanying the bullion was currency bills totalling €4.5 billion. The two-day operation was given full security from armed guards, multiple vehicles, and air escorts to ensure no threats.
Early in the current global economic crisis, the European Central Bank eased its prohibition on monetary financing of government debt. However, fearing the side effects could “lead to zombification, both with respect to banking sectors and also with respect to corporate sectors,” Dr. Klaas Knot has previously warned against excessive quantitative easing.
The Dutch economy is highly dependent on exports and, like all major economies, is vulnerable during the coronavirus crisis. Currently, according to the second estimate conducted by Statistics Netherlands (CBS), gross domestic product (GDP) declined by 8.5 percent in Q2 2020 relative to Q1 2020. The security of Dutch gold reserves will therefore be a major priority during the bank's reconstruction.