Clear advantage for Russia (no counterparty risk)

The Russian Federation still holds less gold reserves than Germany. However, Russia stores more gold reserves on its own soil than the Germans do on their territory.

By Lars Schall

The one big advantage that gold has in comparison to all other financial assets – no counterparty risk – is only given when you physically posses it, which means that it is available at all times at your own discretion. Germany stores 49 percent of its gold reserves in New York City (at the Federal Reserve Bank of New York) and in London (at the Bank of England). Conversely, this means that only half of a total of about 3,300 tonnes are on German soil – and thus not subject to counterparty risk. Russia stores its gold reserves at 100 percent at home (2/3 in Moscow, 1/3 in St. Petersburg). (1) Accordingly, Russia, with just 2,000 tons by now, may still have less gold than Germany; (2) nevertheless, it has a clear advantage over the Germans.

Already some time ago I talked about this topic with gold market analyst Koos Jansen:

LS: However, the Germans intend to leave roughly half of their gold position in New York and London. This is now the official position of the Bundesbank that they want to leave it there so they are able to react to a real currency crisis if that happens. Do you have to have the gold in London and in New York for such a purpose?

KJ: I would say no. I mean, if there would be a currency crisis, people would rush to gold and your gold would become more valuable and you would like to have it at home, not in England or New York. Only if there was a crisis and you want to sell gold, you would like to have gold in London, but how I look at it, I think it’s better with economic turmoil up ahead to have your gold at home than in England.

LS: Yes, and the IMF says that gold, monetary gold, physical bullion gold is the only financial asset with no counterpart risk.

KJ: Yes, with no counterparty risk. This was stated in the balance payments manual number six. Yeah, yeah. I think those things are really significant and, you know…

LS: Yes, but in order to be such a financial asset, you really need to have it in your own possession, on your own soil, right?

KJ: Right. You’re absolutely right. If you talk about gold and gold is the only asset with no counterparty risk, you’d need it at home, and of course it does have a counterparty risk if it’s in London or in New York. It’s as simple as that. Yeah, you’re right. (3)


(1) See ”Bank of Russia Gold Storage” at: “Bank of Russia”, published by BullionStar at:
(2) See “Russia gold reserves smash soviet-era record as part of Moscow’s de-dollarization drive”, published by Russia Today on November 2, 2018 at:
(3) See Lars Schall: ”China understand the bullion game”, interview with Koos Jansen, published by GoldSwitzerland on December 5, 2015 at:

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