European Central Bank (Central Bank of Europe)

By: EconomyWatch   Date: 9 September 2010

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The ECB is the Central Bank for the single European currency euro. The bank's main task is to preserve the purchasing power of euro and ensure economic stability in the region.

The primary objective is to maintain price stability in the region. The ECB strives to perform the following functions:

  • Issuance of banknotes within the euro area
  • Collecting statistical information necessary for carrying out different tasks
  • Contributing toward smooth functioning of the entire Euro system and ensuring stability of the financial system
  • Maintaining working relations with relevant institutions, bodies and forums within the EU as well as outside the purview of EU

The Governing Council is the main decision making body of the European Central Bank.

The Council comprises of six members of the executive board and the governors of all the national central banks of the twelve countries within the European Union. The Governing Council has its meeting twice a month in Frankfurt, Germany. Besides, assessing monetary and economic developments the council, during the meeting, also takes decision on its monthly monetary policy decision.

The independence of the ECB is important for ensuring price stability in the region. The ECB's financial arrangements are kept separate from those of the European Community. The bank prepares its own budget with its capital subscribed and paid up by the euro area National Commercial Banks. The bank also has exclusive rights to take up binding regulations to the extent necessary to carry out the tasks of the ESCB and in certain other cases as laid down in specific acts of the EU Council.

Economy Watch offers information on European Central Bank and World Central Banks.
 


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