Fazio emphasised that no decision on the amount of gold
02:36 p.m Mar 21, 1998 Eastern
Fazio emphasised that no decision on the amount of gold which the ECB
would hold had yet been taken. ''It has yet to be defined,'' Fazio said.
Bank of England Governor Eddie George also said on Saturday that the
amount of gold which the ECB will hold would only be decided after the
Bank's governing council were appointed, which is expected to be around
the end of June.
Speculation about how much gold the ECB will hold in its reserves
resurfaced this week on news Belgium had sold a further 299 tonnes,
cutting its holding to around 13 percent of its total reserves.
So far, the gold market is betting on the ECB holding between five and
20 percent of the yellow metal.
Fazio is the first European central banker to indicate the market may be
wrong in this view.
However, Belgian Central Bank Governor Alfons Verplaetse said last week
that gold would form a third of Belgian reserves following the launch of
EMU in January 1999.
The difference between today's 13 percent and the holding then can be
accounted for by the fact that an estimated 470 billion Belgian francs
worth of Belgian foreign reserves are presently held in currencies which
will become euros from January 1999.
Under the Maastricht Treaty, the ECB will hold up to 50 billion euros in
reserves, but the Treaty does not define what the composition of those
reserves should be.
Each country taking part in economic and monetary union (EMU) will
contribute to the reserves in line with its share in the bank's capital.
According to a calculation made by Reuters last week, Italy's share
would be some 15 percent, or 7.5 billion euros.
Those countries not taking part in the single currency at its launch are
under no obligation to transfer reserves to the ECB, meaning the actual
level of reserves the ECB holds at its launch may be less than 50
billion euros. MORE
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