European Central Bank (ECB)

The European Central Bank (ECB) was established in Frankfurt, Germany in 1998 to run the monetary policy of the European Union’s single currency, the Euro. The Euro itself was launched on 1 January 1999, although the introduction of coins and notes in the 12 participating countries took place smoothly and on time three years later on 1 January 2002.

The ECB took over from the European Monetary Institute which was set up in 1994 as its forerunner to oversee the planning for that Bank and the single European currency.

The central banks of the founder-members contributed both US dollars and gold from their own holdings to provide the ECB with its reserves. After much debate, the gold proportion of the reserves was set at 15%, a level seen as confirming an on-going role for gold in official reserves.

The ECB’s initial stock of gold, from the member central banks, is 767 tonnes (24.7 million oz), making it the world’s eighth largest official holder of gold.

The ECB’s first major gold market initiative was to help co-ordinate the so-called Washington Agreement of 26 September 1999 and its role, of watching over the remaining stocks of member national central banks in Europe, which amounted at end-March 2002 to over 11,700 tonnes (376 million oz) and accounted for over one-third of global gold reserves, is crucial. The ECB potentially is a powerful policy-maker in the gold market.