The first President
of the Bank was Wim
Duisenberg, the former president of the Dutch
Central Bank and the European
Monetary Institute. The
current President of the
ECB is Jean-Claude Trichet, former president of the Banque de
France. The ECB is also the embodiment of modern
central banking: the overriding objective of its monetary policy is price
stability; it is independent within a clear and precise mandate; and it is
fully accountable to the citizens and their elected representatives for the
execution of this mandate. These features are not necessarily the result of
purely European developments; they are in line with the worldwide trend.
However, almost nowhere are these features spelled out so clearly and firmly
than in the organic law of the ECB, the Statute of the ESCB and of the ECB.
Their embodiment in the EC Treaty, with quasi-constitutional status, underlines
their importance in the new monetary regime of Europe.
The codification of central bank law in the EC Treaty and the Statute of the
ESCB is likely to serve as a benchmark for central bank law outside the EU: Switzerland,
for example, has recently revised its National Bank Act along the lines of the
Statute of the ESCB.
According to the Treaty establishing the European
Community (Article 105.2), the basic tasks are
the definition and implementation of
monetary policy for the euro area;
the conduct of foreign exchange
the holding and management of the official
foreign reserves of the euro area countries (portfolio management).
the promotion of the smooth operation of
The Governing Council usually meets twice a month at
the Eurotower in Frankfurt am Main,
At its first meeting each month, the Governing
Council assesses economic and monetary developments and takes its monthly
monetary policy decision. At its second meeting, the Council discusses mainly
issues related to other tasks and responsibilities of the ECB and the
While the minutes of the meetings are not published,
the monetary policy decision is explained in detail at a press conference held
shortly after the first meeting each month. The President, assisted by the
Vice-President, chairs the press conference.
Executive Board consists of
members are appointed by the European Council, acting by a qualified majority.
prepare Governing Council meetings;
implement monetary policy for the euro area in accordance with the guidelines
specified and decisions taken by the Governing Council. In so doing, it gives
the necessary instructions to the euro area NCBs;
manage the day-to-day business of the ECB;
exercise certain powers delegated to it by the Governing Council. These include
some of a regulatory nature.
The General Council comprises
President of the ECB;
Vice-President of the ECB; and
governors of the national central banks (NCBs) of the 27 EU Member States.
In other words, the General Council includes
representatives of the 17 euro area countries and the 10 non-euro area
The other members of the ECB's Executive Board, the
President of the EU Council and one member of the European Commission may
attend the meetings of the General Council but do not have the right to vote.
The General Council can be regarded as a
transitional body. It carries out the tasks taken over from the European
Monetary Institute which the ECB is required to perform in Stage Three of
Economic and Monetary Union on account of the fact that not all EU Member
States have adopted the euro yet.
The General Council also contributes to:
ECB's advisory functions;
collection of statistical information;
preparation of the ECB's annual report;
establishment of the necessary rules for standardising the accounting and
reporting of operations undertaken by the NCBs;
The Purposes and Roles of European Central Bank
Central Bank as a part of European Institutions established to manage the
euro. It administers the monetary policy
of the 17 EU Eurozone member states. Its main purpose is to:
stable (keep inflation under control), especially in countries that
use the euro.
Keep the financial
system stable – by making sure financial markets and institutions are
The European Central Bank has
connection with the central banks in all 27 EU countries.
Together they form the European System of Central Banks (ESCB).
The ECB's role includes:
key interest rate (a rate
which is charged or paid for the use of money, an interest rate is often
expressed as an annual percentage of the principal) for the Eurozone and
controlling the money supply
the Eurozone’s foreign-currency reserves and buying or selling
currencies when necessary to keep exchange rates in balance
to ensure financial markets and institutions are adequately supervised
by national authorities, and that payment systems function smoothly
central banks in Eurozone countries to issue euro banknotes
and assessing the risk they pose to price stability.