Montesquieu Institute: from science to society

European Central Bank (ECB)

Met dank overgenomen van Europa Nu.

The European Central Bank (ECB) manages the euro and frames and implements  EU economic & monetary policy. Its main aim is to  keep prices stable, thereby supporting economic growth and job creation.

What does the ECB do?

  • Sets the interest rates at which it  lends to commercial banks  in the  eurozone  (also known as the euro area), thus controlling money supply and inflation
  • Manages the eurozone's  foreign currency reserves  and the buying or selling of currencies to balance exchange rates
  • Ensures that  financial markets & institutions  are well supervised by national authorities, and that payment systems work well
  • Ensures the safety and soundness of the European banking system
  • Authorises  production of euro banknotes  by eurozone countries
  • Monitors  price trends  and assesses risks to  price stability.

Full list of ECB tasks

Composition

The ECB President  represents the Bank at high-level EU and international meetings. The ECB has the 3 following  decision-making bodies:

  • Governing Council – the  main decision-making body

    Consists of the Executive Board (see below) plus the governors of the national central banks from eurozone countries.

  • Executive Board – handles the  day-to-day running  of the ECB.

    Consists of the ECB President and Vice-President and 4 other members appointed for 8-year terms by the leaders of the eurozone countries.

  • General Council – has more of an  advisory & coordination role.

    Consists of the ECB President and Vice-President and the governors of the central banks from all EU countries.

How does the ECB work?

The ECB works with the national central banks of all EU countries. Together they form the European System of Central Banks.