Mr Barry Koston
Information Access Team
Via email to:
020 3461 4878
020 3461 5460
4 April 2019
Please quote ref. CAS-06142-M5Y9M9 on all
Dear Mr Koston
Thank you for your email of 11 March in which you ask the following under the Freedom of Information Act
2000 (‘FoI Act’):
‘Q,1. After the link with gold was broken in 1931. What happened to the gold reserves that the
public had with the bank of england? After all, the public had their receipts for the gold deposits.
Q,2. After 1931, If the bank didn't return the gold supply to the public, then what did the bank
provide (remedy) back to the public, equal or more in value?’
May I first explain that the FoI Act provides a general right of access to recorded information held by a
public authority. It does not require a public authority to answer general questions on a subject as is the
case in this instance. However, in order to be helpful I have provided the following information which
includes information previously provided in answer to a different request which you referenced in your
When Britain finally left the gold standard in 1931, the note issue became entirely fiduciary, that is wholly
backed by securities instead of gold. Since that time there has been no other asset into which holders
have the right to convert Bank of England notes. They can only be exchanged for other Bank of England
notes, and our banknotes keep their face value for all time. Nowadays public faith in the pound is
maintained in a different way – through the Bank of England’s monetary policy, the object of which, by
statute, is price stability.
Following the end of the Gold Standard in 1931 the gold and foreign exchange reserves were transferred
to HM Treasury, these reserves are still managed by the Bank on behalf of the Government, and are held
in an account called the Exchange Equalisation Account (‘EEA’). Further information about the reserves
can be found on our website at: https://www.bankofengland.co.uk/markets/foreign-currency-reserves
You may also find the following article published in our Quarterly Bulletin in 1968 (pages 377-390) of
interest. It explains the origins of the EEA and includes a history of how different events impacted on the
country’s reserves. You will also see on pages 382/383 of the article that with the outbreak of war, ‘All
gold and exchange held by residents had to be offered for sale to the Treasury as part of the
concentration of the country’s external resources
…’. The article can be viewed at: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/1968/the-exchange-equalisation-
Bank of England, Threadneedle Street, London EC2R 8AH T +44 (0) 20 3461 4444 www.bankofengland.co.uk
Information Access Team
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