You may not be familiar with the European Central Bank, but it will have had an affect on your life in some way. Here’s our quick introduction.
The ECB is the central bank for the Euro, and its purpose is to maintain price stability within the Eurozone. It administers monetary policy for the Eurozone, which consists of 19 member states. The ECB keeping prices stable and inflation low helps support economic growth. The balancing act is achieved through setting interest rates for commercial lending, monitoring price trends and assessing risk, and keeping an eye on national authorities to make sure they keep financial markets and institutions in line. It has to stay independent and can’t seek any political influence.
The ECB was established by the Treaty of Amsterdam in 1998, which increased the powers of the European parliament.
The ECB President is the Italian economist and banker Mario Draghi, who has held the top job since November 2011. The bank is made up of three bodies – the Governing Council, the Executive Board and the General Council. It forms part of the European System of Central Banks, which includes every other national central bank in the EU.
The European Central Bank, known as the ECB, now has its headquarters in Frankfurt, Germany. A new visitors’ centre is planned for 2016.
The owners and shareholders are the 28 member states of the EU.
There’s an impressive 526 billion Euro in capital in the ECB’s reserves.
Despite not adopting the Euro, the UK insisted on a seat on the ECB’s Executive Board – but was denied. The Bank of England now owns a share of the ECB capital stock. Sending money internationally? Use TransferWise to save on bank charges.