European Central Bank

The European Central Bank (ECB) is the central bank for the euro. It administers the monetary policy of the eurozone, which is 19 EU member states and is one of the largest currency areas in the world. It is one of the world's most important central banks and is one of the seven institutions of the European Union listed in the Treaty on European Union. The capital stock of the bank is owned by the central banks of all 28 EU member states. The Treaty of Amsterdam established the bank in 1998. Its headquarters is in Frankfurt, Germany. As of 2015 the President of the ECB is Mario Draghi, former governor of the Bank of Italy, former member of the World Bank, and former managing director of the Goldman Sachs international division (2002–2005). The primary objective of the ECB, mandated in Article 2 of the Statute of the ECB, is to maintain price stability within the Eurozone. Its basic tasks, set out in Article 3 of the Statute, are to set and implement the monetary policy for the Eurozone, to conduct foreign exchange operations, to take care of the foreign reserves of the European System of Central Banks and operation of the financial market infrastructure under the TARGET2 payments system and the technical platform for settlement of securities in Europe. The ECB has, under Article 16 of its Statute, the exclusive right to authorise euro banknotes. Member states can issue euro coins, but the amount must be authorised by the ECB beforehand. The ECB is governed by European law directly. Its set-up is like that of a corporation in the sense that the ECB has shareholders and stock capital. Its capital is €11 billion held by the national central banks of the member states as shareholders. The initial capital allocation key was determined in 1998 on the basis of the states' population and GDP, but the capital key has been adjusted. Shares in the ECB are not transferable and cannot be used as collateral. The European Central Bank is the main bank of the European Union. The main goal of the European Central Bank is to maintain price stability, in other words make sure inflation is below 2%. This is done by controlling the interest rates. Presidents: Wim Duisenberg (from the Netherlands): 1998-2003 Jean-Claude Trichet (from France): 2003-2011 Mario Draghi (from Italy): 2011-2019 Christine Lagarde (from France): 2019-present References