Gordon Brown, the then Chancellor, announced on May 7 1999 that the Government would sell a large share of the Bank’s gold reserves in favour of assets offering a return, such as government bonds. An analysis by the newspaper claims this was the "high water mark of so-called 'anti-gold' sentiment among European central banks".
Central banks in France, Spain, the Netherlands and Portugal, decided later in 1999 to follow Britain and sell off their reserves. At that time, gold was worth around $280 an ounce, less than a third of its current level of more than $900.
European banks sold about 3,800 tonnes of gold, reaping about $56bn, the FT reports citing calculations from official sales data and bullion prices.
Taking into account the likely returns from the investments in bonds, the banks have gained another $12bn. But because today’s gold prices are far higher, they are about $40bn poorer than if they had kept their reserves.
The biggest loser is the Swiss National Bank which sold 1,550 tonnes over the decade and at today’s gold prices is $19bn poorer, followed by the Bank of England, which is $5bn poorer.
Germany and Italy are the only two big European central banks which did not follow the UK, mostly because of domestic disputes about what to do with the proceeds, the report said.
The US, the world’s biggest holder of gold, decided not to follow Europe’s move, while central banks outside Europe have become net buyers of gold.