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Bank of England gold vault
The Bank of England, Threadneedle Street.
The Bank of England gold vault is one of the world's largest repositories of gold, second only to the New York Federal Reserve. In 2018, one-fifth of all the gold in the world was held in the Bank of England (BoE) vault. This includes all of the UK’s gold reserves, as well as gold for other countries and businesses.
As of July 2019, the BoE vault contained 159,807,000 fine troy ounces – or roughly 400,000 gold bars, with each weighing 400 troy ounces. This is equivalent to 5,134 tonnes of gold (5,659 tons) and is valued at well over £200 billion.
Since January 2017, the Bank has published online monthly updates for the total amount of gold it holds. All the gold it stores is London Bullion Market Association-approved, with a minimum refinery fineness of 995. However, the Bank of England is itself not a member of the LBMA as it does not produce bullion.
The majority of the gold deposits it stores is held on behalf of Her Majesty’s Treasury, and other central banks from over 30 different nations. The remainder of its gold is stored for a small number of businesses.
The BBC recently got a rare look inside the Bank of England's gold vault. Image courtesy of BBC.
Bank of England History
The Bank of England has a firm part in British history. Founded in 1694, the Bank of England is the world's eighth oldest bank, and since 1734 it has operated from Threadneedle Street, in the City of London. Originally owned by stockholders, it was nationalised in 1946, and was then made an independent public authority in 1998.
The BoE is nicknamed the ‘Old Lady of Threadneedle Street’, thanks to a 1797 cartoon by James Gillray. It shows Prime Minister of the day, William Pitt the Younger, kissing an old woman in order to get her gold.
The Bank's current underground, concrete-encased vault was built during the 1930s. It covers over 300,000 square foot – equivalent to almost ten football pitches.
Inside the vaults, the gold is stored in bars on numbered shelved pallets. Because of the great weight of the gold being stored, only four shelves are used per column. It is feared that with more than four shelves, the pallets could buckle or sink into the ground.
The Bank of England's gold vault. Photo courtesy of the Bank of England Flickr account.
There is a comprehensive electronic security system, which includes advanced voice recognition. Physical security is also used to gain access, including a huge key, which measures three foot or just under one metre long.
The Bank claims never to have been robbed. Despite this, it is rumoured that in 1836 a sewage worker gained entry to the Bank's vaults. In order to assist the bank, he revealed himself and his means of entry. The surprised and grateful bank directors are believed to have rewarded him with £800 – the equivalent of £80,000 today!
The Bank of England has been a model for many other gold vaults in the United Kingdom, and around the world.
There are seven other vaulting facilities in London alone. Four are from security carriers Brink's, G4S Cash Solutions, Malca-Amit, and Loomis International UK. The other three are from clearing banks: HSBC, ICBC Standard Bank, and JP Morgan.
These seven all store gold and other precious metals, whereas the Bank of England is a gold-only storage facility. All seven are
members and beyond simply storing precious metals, they also ensure the metals they store conform to LBMA standards.
Gold vaults around the world
The world's major gold markets operate through London and New York. It follows that in order to deliver liquidity to these markets, these cities also provide the largest storage facilities.
The United States Federal Reserve Bank of New York, at 33 Liberty Street, is the world's largest gold repository. It holds one quarter of all the world's gold and, like the Bank of England's vault, it stores gold for both the United States and other nations. It is believed that only 2% of its gold actually belongs to the Fed.
The United States Federal Reserve Bank of New York.
The United States Bullion Depository at Fort Knox officially stores half of all the US gold reserves. Other vaults at Philadelphia, Denver and West Point New York store the remaining portion of the US gold reserves.
Frankfurt in Germany is one of the more recent financial centres to gain an international presence. Consequently, the German Bundesbank has a large gold repository in the heart of the city's financial district.
The futuristic Deutsche Bundesbank gold vault. Photo by Nils Thies. Image courtesy of the Bundesbank Flickr account.
The Banque de France also has an impressive gold vault - albeit less modern than Germany's. Their vaults in Paris store 2,435 tonnes of gold, valued at €76.2 billion as of 2015. The underground Parisian vault is known as “La Souterraine”.