Jordan Won’t Rule Out Future SNB Gold Purchases

http://www.bloomberg.com/news/2013-04-26/jordan-won-t-rule-out-future-snb-gold-purchases.html

President Thomas Jordan won’t exclude increasing the central bank’s gold holdings at some point and said most of its reserves are held domestically.
“As part of a good diversification of currency reserves, a certain proportion of gold can help reduce the balance sheet risk,” Jordan said in Bern today, according to a copy of his speech. “We have therefore never ruled out the possibility of future gold purchases.”
The SNB owns 1,040 tons of gold. More than 70 percent are held in Switzerland, with about 20 percent at the Bank of England and 10 percent at the Bank of Canada, he said, for the first time disclosing where the physical assets were stored.
Germany’s Bundesbank in January announced plans to repatriate 674 metric tons of gold from vaults in Paris and New York by 2020. As a result, 50 percent of the German central bank’s gold will be stored in its home city of Frankfurt by the end of the decade.
The SNB’s gold holdings are the target of a popular initiative, which demands that at least 20 percent of the central bank’s assets be in the form of gold. The measure would also block the sale of such holdings and require all SNB gold to be located in Switzerland.
In his speech at the central bank’s annual general meeting in the Swiss capital Jordan said the initiative, were it to go through, would be counterproductive.