BIS - Mr Duisenberg’s opening statement at the press conference held on 7 January 1999

Introductory statement by the President of the European Central Bank, Dr W F Duisenberg, at the press conference in Frankfurt on 7/1/99 (with transcript of questions and answers)

"Ladies and gentlemen, the Vice-President and I are here today to report on the outcome of the first meeting of the Governing Council of the European Central Bank in Stage Three of Economic and Monetary Union. For the first time, the Governing Council took decisions of an operational nature in the context of the single monetary policy.

On 1 January 1999 the euro was successfully launched. From that day onwards, the “Eurosystem” – that is, the ECB and the eleven national central banks of the Member States that participate in the euro – has assumed responsibility for the conduct of monetary policy in the euro area with the primary objective of maintaining price stability.

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Question: I’d just like to talk to you about gold reserves. The ECB said it will readjust the value of its gold reserves on its books each quarter, and I think it has also decided to keep about 15% of its exchange reserves in gold. If there was a major change in the price of gold on the world market, that percentage would be likely to change, and so I would like to ask you if that means that the ECB would buy or sell gold in order to keep its proportion of reserves at that percenrage amount.

Duisenberg: Christian, you’re the gold man!

Noyer: No, there is no such conclusion to draw, because it was not a decision to hold 15% of foreign exchange reserves in gold, as a structural decision of the Governing Council. The decision of the Governing Council at the time was that in the initial transfer 15% would be made of gold, but that has no consequence on the structure of foreign exchange reserve to develop in the future, nor has it any consequence on the total percentage of gold holdings of the system, including the reserves that are still in the balance sheet of national central banks, and we know that in some cases they have more than 15% gold, and in some cases they have less, but they are for the moment and for the foreseeable future keeping the proportion they have.

Duisenberg: And in this case, the foreseeable future is much longer than in the earlier case.

Question: Mr Duisenberg, the fact that the euro has got off to such a good start is to some extent an expression of confidence in you and can we expect you to stay for eight years?

Duisenberg: This is for the first time that I give the answer which I announced I would give already on 31 December 1998, that is “no comment”.
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Source: http://www.bis.org/review/r990111a.pdf?frames=0