Swiss petition succeeds for referendum to ban gold sales, require repatriation


Swiss Right Wing Forces Referendum on Banning SNB Gold Sales

By Katharina Bart and Albert Schmieder
Wednesday, March 20, 2013

ZURICH, Switzerland -- The right-wing Swiss People's Party (SVP) has gathered enough signatures to force a referendum on a proposal to ban the country's central bank from selling any of its gold reserves.

The proposal, dubbed "Save our Swiss Gold," would prohibit the Swiss National Bank (SNB) from offloading its gold reserves as well as force it to hold at least 20 percent of its assets in gold, the committee behind the plan said on Wednesday.

"Gold reserves aren't speculative objects for the SNB or politicians. They belong to the people," SVP politician Luzi Stamm, whose party began its push for a referendum more than two years ago, said in a statement.

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At the end of 2012, the SNB held 1,040 tonnes of gold valued at nearly 50.8 billion Swiss francs ($54 billion), just over 10 percent of its total assets of 499.4 billion francs.

The SNB has built up huge reserves of foreign exchange under interventions to defend the 1.20 per euro lid it imposed on the Swiss franc in 2011 to protect the economy from recession and deflation as the safe-haven currency soared.

SNB spokesman Walter Meier said: "The SNB has considerable concerns, in particular of a monetary policy nature, about the initiative's demands."

The initiative's organizers called on the SNB to begin topping up its gold reserves toward the 20 percent mark and selling the euros it has accumulated through interventions.

The SNB sold 250 tonnes of gold throughout 2007 and 2008, arousing public criticism at the time. The central bank has since said it won't sell any more gold holdings but it is wary of any rules that might curb its freedom of maneuver in shaping monetary policy.

A bullion price rally fuelled a 1.4 billion franc windfall on the SNB's gold holdings last year. The SNB's overall net profit for 2012 was 6 billion francs amid gains on a variety of investments.

Swiss citizens can bring initiatives, a key feature of Swiss direct democracy, if they collect 100,000 signatures within 18 months. However, a popular vote on the gold initiative may be years off and isn't likely to win majority backing, after a similar attempt failed in Swiss parliament.

The initiative also states the SNB's gold would have to be stored within Switzerland. At present, where exactly the gold reserves are stored is a closely guarded secret of the SNB.

In 2003 then-Swiss Finance Minister Kaspar Villiger famously told parliament he couldn't divulge where the gold bars are stored because "I don't know either, don't have to know, and don't want to know."

In the past the SNB has said its physical gold reserves are stored domestically and internationally, with crisis scenarios being the main reason for decentralizing storage. Since 2005 the majority has been held in Switzerland, the SNB said.

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