9 May 2012
|Institutional structure and role of central banks in EU|
European Central Bank, European System of Central Banks and the Eurosystem
The European Central Bank (ECB) is an independent, supranational monetary institution, representing the core of the ESCB and the Eurosystem. The (ECB) is headquartered in Frankfurt am Main, Germany.
The primary objective of the ECB is to maintain price stability, and without prejudice to its primary objective, to support the general economic policies of the EU. All other objectives are of secondary importance and must not be in conflict with its primary objective.
The ECB tasks are the following: 1) defining Eurosystem policies; 2) deciding, co-ordinating and monitoring the monetary policy operations; 3) adopting legal acts (primarily guidelines and instructions, to ensure that decentralised operations are carried out consistently by national central banks; 4) planning, co-ordinating and monitoring the issuance of euro banknotes; 5) interventions on the foreign exchange markets; 6) international and European co-operation; 7) monitoring financial risks and 8) fulfilling advisory functions to Community institutions and national authorities.
The ECB's decision-making bodies are the General Council, the Governing Council and the Executive Board. These bodies also manage the ESCB and the Eurosystem.
The General Council of the ECB is the ECB's decision-making body, consisting of the ECB's President and Vice-President and the governors of the national central banks of all 27 EU Member States. It can be regarded as a transitional body and it will be dissolved once all EU Member States have introduced the euro (since at that point, the composition of the ECB's General Council will be identical to the composition of the ECB's Governing Council).
The Governing Council of the ECB is the main decision-making body of the Eurosystem that adopts monetary policy decisions for the euro area, and it consists of the Executive Board members (President and Vice-President of the ESB and four other members) and the governors of the national central banks of the 16 EU Member States that have introduced the euro.
The Executive Board of the ECB is an operational decision-making body of the ECB and the Eurosystem, which manages day-to-day business. It consists of the ECB's President, Vice-President and four other members (a total of 6 members).
As regards the organisational structure, the ECB consists of 17 organisational units, among which there are 10 main and 7 ancillary business areas. The ECB's employees come from all 27 EU Member States and their total number is approximately 1 600 (according to data for 2011).
European System of Central Banks (ESCB) is a group of central banks, comprising the European Central Bank (ECB) and national central banks (NCBs) of all EU Member States.
Eurosystem is a group of central banks, comprising the European Central Bank and national central banks of the EU Member States that have introduced euro.
National central banks as a part of the ESCB and the Eurosystem
National central banks (NCB) have an important role in implementing the activities of the ESCB and the Eurosystem. They carry out their tasks in accordance with the rules, instructions and guidelines adopted by the ECB's decision-making bodies. The decisions are adopted at the ECB and are implemented in a decentralised manner, i.e. through national central banks.
The NCBs' tasks are the following: 1) execution of monetary policy operations (as ECB's agents); 2) operational management of the ECB's foreign reserves; 3) management of their own foreign reserves; 4) operation and supervision of payment systems; 5) joint issuance of banknotes together with the ECB; 6) collection and processing of statistics, and 7) providing assistance to the ECB in translating and issuing the publications and preparing economic analyses.