Creation and functioning of the European Central Bank. Organizational structure and functions of the European Central Bank. European Monetary System within the ECB

General provisions

The functioning of the ESCB is provided by the ECB and its bodies, which are vested with the right to make decisions and legally binding regulations. According to Art. 106(2) of the EU Treaty, the ECB is a legal person. In each Member State, he enjoys the widest legal capacity and legal capacity granted to legal persons under national laws. In particular, he may acquire or alienate movable and immovable property and be a party in court. It is subject to the provisions of the Protocol on Privileges and Immunities. The bank, in particular, is exempt from paying taxes to the state in whose territory it is located (in this case, in the Federal Republic of Germany, in the city of Frankfurt), on operations carried out by it, and is exempt from paying fees usually established on the amount of business transactions.

The specificity and peculiarity of the legal status of the ECB, which is equated by the Lisbon Treaty with the institutions of the Communities and the Union, is that in practice it is not an administrative body, but a banking institution with its own capital and resources.

Thus, the ECB is, first of all, the Central Bank, which performs all the functions inherent in a banking institution, and at the same time it is an institution endowed with administrative power and the right to issue legal prescriptions. As with the European Monetary Institute (EMI), the ECB is subject to the principle of independence. Neither it nor the national Central Banks nor the members of the governing bodies of the ECB, in the exercise of their powers, tasks and duties, should seek or receive instructions from either the EU institutions or the national authorities of the Member States. Accordingly, the institutions of the Union and the national authorities are obliged to refrain from any action aimed at influencing the leaders of the ECB or the national central banks in the performance of tasks related to the implementation of the constituent treaties and secondary law provisions relating to the establishment and operation of the monetary union.

The ECB ensures that the tasks entrusted to the ESCB are carried out independently or through the national central banks. At the same time, in addition to the monetary functions, which are the main ones for solving the tasks set for the ESCB, the Eurobank should also perform other important functions.

For example, in accordance with Art. 105(4) of the EC Treaty, he has the right to advise on any proposed Community act within his field of competence. It should also be noted that the ECB also advises the national authorities on any draft legal act falling within its competence, but within the framework and under the conditions established by the Council.

The ECB may submit opinions on matters within its competence to the relevant Community institutions or bodies or to national authorities.

In order to implement the tasks of the ESCB, the ECB, with the help of national central banks, collects the necessary statistical information from the competent national authorities, or directly from participants in economic activity. To this end, it cooperates with the institutions and bodies of the Community, as well as with the competent authorities of the Member States or third countries and with international organisations. As far as possible, national central banks carry out the same tasks.

The ECB shall promote, where necessary, the harmonization of rules and practices in the organization of the collection, processing and dissemination of statistical data in the fields within its competence.

The Council determines the circle of individuals and legal entities, taking into account the requirements for the collection of information, the observance of its confidentiality, as well as the provisions that ensure its provision without fail.

In the field of international cooperation, the ECB decides on the representation of the ESCB. The ECB and, with its approval, national central banks, may participate in international monetary organizations.

The ECB prepares and publishes quarterly reports on the activities of the ESCB. A consolidated financial report of the ESCB is published every week. In accordance with Art. 109 b (3) of the EU Treaty, the ECB sends its annual report on the activities of the ESCB and on monetary policy, both in the previous year and in the current year, to the European Parliament, the Council and the Commission, and the European Council. The above reports and reports are made available to interested parties free of charge.

In accordance with Art. 105 a (1) of the EC Treaty, the Governing Council is vested with the exclusive right to authorize the issue of banknotes within the Community. The ECB and national central banks may issue such banknotes. The banknotes issued by the ECB and the national banks are the only banknotes of their kind to have legal tender status within the Community. The ECB should respect, as far as possible, the current practice of issuing and issuing banknotes.

It should be emphasized that according to Art. 105(6) of the Treaty, the Council may take a unanimous decision obliging the ECB to carry out specific tasks concerning the policy of supervision of credit institutions and other financial institutions, with the exception of insurance undertakings.

For the full implementation of the functions assigned to it, the Eurobank is endowed with significant legal powers. In particular, on the basis of the provisions of Art. 108 a of the EU Treaty, the ECB has the right to:

• * to adopt regulations to the extent that it is necessary to solve the tasks facing it, as well as in cases requiring the adoption of certain acts by the Council;
• * take the decisions necessary for the fulfillment of the tasks assigned to the ESCB by virtue of the Treaty and the Statute;
• * make recommendations and conclusions.

Regulations, as one of the sources of EU secondary law, are of general application. They are binding in their entirety and are acts of direct application in all Member States. Recommendations and opinions are not binding. The decision is binding in its entirety to those to whom it is addressed. It is noteworthy that on the basis of Art. 190-192 of the Treaty, the regulations and decisions are subject to the rules provided for in the regulations of the EU institutions. The ECB may decide to publish its decisions, recommendations and opinions.

The ECB is empowered to impose lump-sum fines or periodic penalties on businesses for failure to comply with obligations arising from its regulations and decisions.

The ECB is vested with the right to bring claims, and in individual cases, the actions or omissions of the ECB should be open to consideration and interpretation by the Court. Disputes between the ECB, on the one hand, and its creditors, debtors or any other persons, on the other hand, are considered by the competent national courts, except in cases falling within the competence of the Court of Justice of the European Union.

The ECB is subject to Art. 215 of the EC Treaty concerning the liability regime. National central banks are liable in accordance with their national laws.

The Court is competent to rule on any arbitration clause contained in a contract entered into by or on behalf of the ECB, whether that contract is governed by public or private law. The decision of the ECB to bring an action before the Court is made by the Board of Governors.

The Court is competent to consider disputes concerning the fulfillment by national central banks of obligations arising from the Charter. If the ECB considers that national central banks have failed to comply with their obligations under the Statute, it must give a reasoned opinion on the matter after giving the national central bank concerned an opportunity to comment. If the national central bank concerned fails to comply with the recommendations of the opinion within a time limit fixed by the ECB, the latter may refer the case to the Court.

Thus, the EU Court of Justice acts as the supreme arbiter in resolving contentious issues within the ESCB, that is, in disputes between the ECB and national central banks.

The ECB shall enjoy in the territory of the Member States such privileges and immunities as are necessary for the performance of their tasks, in accordance with the conditions laid down in the Protocol on Privileges and Immunities of the European Communities annexed to the Treaty Establishing the Single Council and the Single Commission of the European Communities.

Organizational structure of the ECB

According to paragraph 3 of Art. 106 of the EU Treaty and art. 9.3 of the Statute, the management of the European Central Bank is carried out by its governing bodies, namely the Board of Governors, the Board and the General Council.

The main governing body of the ECB is the Governing Council. It consists of 6 members of the Board of the ECB and governors of the national central banks of the 12 member states included in the "eurozone". Each member has one vote. The main task of this body is to develop monetary policy for the euro area. In this regard, the Board of Governors can set the amount of interest rates, according to which commercial banks will be able to receive money. Protocol on the Statute of the European System of Central Banks and of the European Central Bank annexed to the Treaty establishing the European Community. OJ. C 191 of 07/29/1992. also includes provisions to ensure the effective functioning of the Board of Governors in the process of enlargement of the eurozone. These amendments were made by Council Decision EC No. 223/2003, which relate to the rotation system.

The Board consists of the President and Vice-President of the ECB and four other members. They are appointed by the heads of state or government of the member countries of the euro area. This body ensures the implementation of monetary policy, in accordance with the instructions of the Board of Governors and gives the necessary instructions to the NCB. The Board also organizes meetings of the Board of Governors and is responsible for the day-to-day management of the ECB.

The General Council is the third governing body of the ECB, consisting of the President and Vice-President of the ECB and the governors of the national central banks of all EU member states. The President of the EU Council and one member of the Commission may attend meetings of the General Council of the ECB, but may not vote. In Art. 47 of the Protocol contains an exhaustive list of duties of the General Council, namely:

• - implementation of the intermediate tasks of the ECB;
• - participation in the advisory function of the ECB;
• - collection of statistical information, participation in the report on the activities of the ECB, etc.

Legal regulation of financial activities and monetary operations of the ESCB

To achieve the main objective of its monetary policy, the ESCB has extensive monetary functions. In accordance with Article 17 of the Statute, the ECB and national central banks, for the purpose of conducting their operations, may:

• * open accounts for credit institutions, government agencies and other market participants;
• * accept assets, including securities, passing in parallel on accounting records.

All lending operations of the ESCB are subject to adequate collateral, which can primarily be liquid lending instruments that meet the standards of the entire euro area. At the same time, the use of liquid and non-liquid assets that are of economic importance only within the states and approved in them is not excluded.

In order to achieve the objectives of the ESCB and fulfill its tasks, the ECB and national central banks may carry out the following operations:

• - operations in the capital markets
• § by direct purchase and sale (for immediate payment or for a period of time) or under a repurchase agreement;
• § by granting and receiving loans and marketable securities, in Community and other currencies, as well as in precious metals;
• - lending operations with credit institutions and other market participants, with the provision of a loan with adequate collateral.

The ECB establishes general principles for the operation of an open market and for the conduct of lending operations by itself or by national central banks, including the announcement of the conditions under which they are willing to engage in such operations.

The ECB may require credit institutions established in Member States to hold minimum reserves in the accounts of the ECB and national central banks, in accordance with the objectives of monetary policy. The Board of Governors may lay down rules relating to the calculation and determination of the required minimum reserves. In cases of violations, the ECB is empowered to charge penalty interest and apply other sanctions with a similar effect.

The Council determines the base for the minimum reserves, the maximum allowable ratios between the value of these reserves and their base, as well as the appropriate sanctions in case of non-compliance.

The Board of Governors may, by a majority of 2/3 of the votes cast, decide on the use of the most appropriate methods of exchange control. The Council, based on an appropriate procedure, determines the scope of such methods if their use imposes obligations on third parties.

It should be especially noted that the European Central Bank announced its intention to maintain continuity and use all forms of the ESCB's monetary policy that have proven themselves on the positive side.

In accordance with Art. 104 of the EC Treaty prohibits overdrafts or any other type of authorized credit with the ECB or national central banks in favor of Community institutions and bodies, central governments, regional, local and other public authorities governed by public law or public enterprises of the Member States, as well as and direct purchases of debt from them by the ECB or national central banks.

However, the ECB and national central banks may act as fiscal agents in relation to the above structures.

It should be noted, however, that public credit institutions, which, in the context of central bank reserve creation, are given the same treatment by national central banks and the ECB as private credit institutions, are not subject to these rules.

In order to ensure the efficiency and sustainability of the clearing and payment system within the Community and with third countries, the ECB and national central banks may provide credit.

The external functions of the ECB and national central banks include the following:

• * establishing and maintaining relations with central banks and financial institutions in third countries and, if necessary, with international organizations;
• * Acquisition and sale on terms of immediate payment and for a period of all types of assets in foreign currency and in precious metals. The term "foreign currency assets" includes securities and all other assets in the currency of any country or in units of account and expressed in any form;
• * storage and management of the above assets;
• * carrying out all types of banking operations in relations with third countries and international organizations, including the provision and receipt of loans.

In addition to transactions arising from their tasks, the ECB and national central banks may engage in transactions carried out for administrative purposes and intended for their staff.

The ECB may give advice and advice to the Council, the Commission and the competent authorities of the Member States on the scope and implementation of Community legislation relating to reasonable supervision of the activities of credit institutions and the stability of the financial system. Subject to any decision of the Council in the context of Article 105(6) of the EC Treaty, the ECB may carry out specific tasks relating to policies relating to reasonable control of credit institutions and other financial institutions, with the exception of insurance undertakings.

The financial year of the ECB and national central banks begins on the first day of January and ends on the last day of December. The annual accounts of the ESCB are drawn up by the Board in accordance with the principles laid down by the Governing Council. The accounts are approved by the Board of Governors and thereafter published. For analytical and operational purposes, the Board draws up a consolidated balance sheet of the ESCB, covering those assets and liabilities of the national central banks that fall within the scope of the ESCB. To this end, the Board of Governors establishes the necessary rules for the standardization of reporting and reporting on transactions carried out by national central banks.

The accounts of the ECB and national central banks are subject to review by independent external auditors recommended by the Board of Governors and approved by the Board. The auditors shall be empowered to examine all the books and accounts of the ECB and the national central banks and all information concerning their transactions.

Of fundamental importance are Articles 28 and 29 of the Statute concerning the capital of the ECB and the criteria for subscription to it. According to these provisions of the Statute, the capital that had to be held after the establishment of the ECB was 5 billion euros. However, due to the fact that at that time 4 EU countries were not members of the Economic Monetary Union, the capital of the ECB immediately after its foundation amounted to 3947 million euros. At the same time, the Articles of Association provide that the capital may be increased by an amount to be determined by a decision of the Board of Governors, adopted by a qualified majority. An important feature of the functioning of the ECB is the fact that the only subscribers and holders of the capital of the ECB are national central banks.

After the establishment of the ESCB and the ECB, a so-called distribution criterion was established for the subscription to the capital of the ECB. In accordance with this criterion, each national central bank was assigned its own quotas equal to the sum of:

• * 50% of the respective Member State's share of the Community's population in the penultimate year preceding the year in which the ESCB was established;
• * 50% of the respective Member State's share of the gross domestic product, at Community market prices, for the last five years preceding the penultimate year before the establishment of the ESCB.

These values, calculated as a percentage, should be rounded to the nearest value with an accuracy of 0.05.

The Board of Governors determines by a qualified majority the amount and form of payment of capital. Shares of national central banks in the authorized capital of the ECB may not be transferred, pledged or seized.

If the distribution criterion changes, the national central banks transfer capital shares to each other in the amounts necessary to bring the distribution of capital shares in line with the application of the distribution criterion. The Board of Governors determines the terms and conditions of such transfers.

The shares assigned to the national central banks are adjusted every five years after the establishment of the ESCB. The adjusted distribution criterion is applied in practice from the first day of the following year.

Through national central banks, the ECB is backed by foreign reserve assets other than the currencies of member states, euros, International Monetary Fund (IMF) reserves and special drawing rights (SDRs) of up to €50,000 billion equivalent. The Governing Council decides on the proportions declared by the ECB following its establishment and the amounts declared at a later date. The ECB shall have the right to hold and manage the foreign reserves transferred to it and to use them for the purposes set forth in the Statute.

The contributions of each national central bank are set in proportion to its share in the authorized capital of the ECB. Each national central bank is credited by the ECB on demand proportional to its contribution. The Board of Governors determines the face value and payment of such claims. Further claims on foreign reserve assets in excess of the established limits may be satisfied by the ECB, within the limits and subject to the conditions established by the Council in accordance with the existing procedure.

The ECB may hold and manage the IMF's reserve holdings and SDRs and pool such assets into a common fund.

National central banks must be authorized to conduct transactions in order to fulfill their obligations to international organizations. All other transactions in foreign reserve assets remaining in national central banks after the aforementioned transfers, and transactions of Member States in their current foreign exchange balances above a certain limit, are subject to the approval of the ECB in order to ensure the coherence of the exchange rate and the monetary policy of the Community. The Board of Governors is developing guidelines to facilitate such operations.

Income accumulated by the national central banks in the course of their implementation of the monetary policy of the ECB (the so-called "foreign exchange income") is distributed at the end of each financial year. The amount of foreign exchange income of each national central bank should be equal to its annual income remaining after deducting banknotes in circulation and deposit liabilities to credit institutions from its assets. These assets are to be reserved by the national central banks, in accordance with the main guidelines set by the Board of Governors.

If the balance sheet structures of the national central banks, in the judgment of the Board of Governors, do not permit the application of the above rules, the Board of Governors may decide by a qualified majority that foreign exchange earnings shall be measured in accordance with some alternative method for a period not exceeding five years. The value of the foreign exchange income of each national central bank is reduced by an amount equivalent to the interest paid by this central bank on its deposit obligations to credit institutions.

The Board of Governors may decide that national central banks should be reimbursed for expenses incurred by them in connection with the issuance of banknotes or, in exceptional circumstances, due to special losses incurred as a result of the monetary policy pursued by the ESCB. Reimbursement must be made in a manner deemed acceptable by the Board of Governors. These amounts can be offset against the currency income of the national central bank.

The amount of the foreign exchange income of the national central banks shall be distributed by the national central banks in proportion to their paid-in share in the capital of the ECB, subject to any decision taken by the Council.

Cashless settlements and the settlement of balance sheets arising from the distribution of foreign exchange income are carried out by the ECB in accordance with the main guidelines set by the Board of Governors.

The net profit of the ECB is distributed as follows: an amount determined by the Board of Governors and not exceeding 20% ​​of net profit is transferred to the general reserve fund, subject to a limit of 100% of capital; the remaining net profit is distributed among the shareholders of the ECB, in proportion to the share of capital paid by them. In case of losses incurred by the ECB, the shortfall may be made up from the general reserve fund of the ECB and, if necessary, by decision of the Board of Governors, from the foreign exchange profit of the relevant financial year, in proportion and within the limits of the amounts distributed among the national central banks.

Tasks of the ESCB at the present stage

At present, the main tasks of the European Economic System are:

• - definition and implementation of monetary policy in the Eurozone;
• - managing foreign exchange operations and retaining and attracting official foreign investment in the Eurozone states;
• - issue of banknotes in the Eurozone;
• - facilitating the smooth operation of payment systems;
• - collection of necessary statistical information;
• - monitoring the development of the banking and financial sectors;
• - facilitating the smooth exchange of information between the ESCB and the supervisory authorities.

The ECB has developed a strategy to maintain price stability - the so-called monetary policy strategy. This strategy is based on two pillars: the fundamental role of money - this is determined by the recommended level of increase in the money supply in the broad sense of the word, while inflation is considered only as a result of having too much money with a limited amount of goods and services. This concept of money, known as MOH, defines the amount of cash in circulation, the short-term deposits of credit institutions (as well as other financial institutions) and the short-term liabilities issued by these institutions. The recommended annual growth rate for the MOH indicator (since 1999: 4.5%) is intended to assist the Board of Governors in providing analysis and information relating to monetary concepts. The second pillar of the ESCB's monetary policy strategy is a broad assessment of the prospects for further price increases and the risks of price stability in the Eurozone. This assessment is carried out using a wide range of economic indicators that inform about further price increases. Such indicators are: the level of wages, the exchange rate, various measures of economic activity, indicators of fiscal policy, etc. In general, together, these two pillars of the ECB's strategy provide a detailed study and analysis of monetary, financial and economic development. This allows the ECB to set the best rate to maintain price stability. The ECB's monetary policy also supports the euro's value outside the Eurozone.

To achieve price stability, the Eurosystem uses some monetary policy instruments. Their goal is to influence market rates, ensure the liquidity of the banking system and determine the main direction of monetary policy. Directions of monetary policy are formulated by the Board of Governors of the ECB. In many cases, they are carried out by national central banks.

The main instruments of the ECB's monetary policy are: refinancing operations, point operations, regulation of the official interest rate, acceptance of deposits.

The main refinancing operations are used to ensure the liquidity of the banking system and determine the main direction of monetary policy. They are held once a week and are considered completed after two weeks.

Long-term refinancing operations also provide liquidity, but are held on a monthly basis and are considered completed after three months.

There are also two other possibilities: the regulation of the official interest rate and the possibility of accepting deposits.

Spot transactions are carried out on a temporary basis in order to determine the liquidity of the market situation and manage rates. A specific feature of these transactions is an attempt to mitigate the interaction of unexpected fluctuations in market rates.

European Central Bank(ECB) is euro area(Eurozone), which was formed on June 1, 1998. Its headquarters are located in the German city of Frankfurt am Main. to the governing bodies ECB includes representatives from all member states of the European Union (EU). completely independent of the rest of the EU bodies.

The predecessor of the ECB was European Monetary Institute, formed in 1994 in connection with the transition to the second stage of building the EU Economic and Monetary Union. This institute played a leading role in preparations for commissioning in 1999.

The History of the European Central Bank:

Functions of the ECB

The main functions of the European Central Bank are:

• development and implementation monetary policy eurozone;
• control ESCB;
• emission Euro;
• definition key interest rates;
• The main goal of the ECB is to maintain price stability in the euro area.

European System of Central Banks (ESCB)

European System of Central Banks comprises ECB and national central banks (NCBs) of all EU countries. The main official goal of the ESCB is to maintain stability prices in the euro area. Her tasks also include:

• develop and implement monetary policy in the eurozone;
• conduct international currency transactions;
• store and manage Member States;
• contribute to the smooth functioning of the payment system.

The ESCB includes such national and central banks as:

• National Bank of Belgium (www.nbb.be);
• German Federal Bank, or Bundesbank (www.bundesbank.de);
• Bank of Greece (www.bankofgreece.gr);
• Bank of Spain (

The European Central Bank (ECB) is the central bank of the EU and the euro area.

The European Central Bank (Eng. European Central Bank) was established on 07/01/1998 as part of the Monetary Union. It is the successor of the Maastricht Treaty established in 1994.

The Monetary Institute, whose task was to oversee the European monetary system and prepare the Monetary Union, for which, in addition to developing convergence criteria, it was also envisaged to create a central bank. The ECB is integrated into the European System of Central Banks, which also includes the central banks of all member states, and into the Eurosystem, which includes the central banks of the EU states that use the euro in circulation. In accordance with Art. 13 of the EU Treaty, the ECB belongs to the institutions of the EU.

The supreme governing body of the ECB is the EU Governing Council, which consists of the chairmen of the national central banks of the states participating in the Monetary Union, and members of the Directorate of the ECB. Traditionally, four out of six seats are occupied by representatives of the four major central banks: France, Germany, Italy and Spain. The Directorate of the ECB, in turn, consists of six banking specialists (Chairman, his Deputy and four members) who are proposed by the Council of the EU and after consultation with the European Parliament and the Council of the ECB are appointed by the European Council. Directors are appointed for a period of eight years.

Only members of the Board of Governors present in person or participating in the teleconference have the right to vote. A member of the Board of Governors may nominate a replacement if he is unable to attend meetings for an extended period of time.

The voting requires the presence of 2/3 of the members of the Council, but an emergency meeting of the ECB may be held, for which there is no set threshold for attendance. Decisions are taken by simple majority, in case of equality of votes, the vote of the Chairman has more weight. Decisions on the capital of the ECB, distribution of profits, etc. are also decided by voting, the weight of votes is proportional to the shares of national banks in the authorized capital of the ECB.

The priority goal of the ECB is price stability (art. 127 of the Treaty on the Functioning of the EU). To this end, it coordinates the monetary and foreign exchange policy, as well as the system of payments with the help of a wide range of instruments, in particular from 01.01.2002 through the authorization of the emission of the euro by the member states.

The main tasks of the ECB:

Development and implementation of the monetary policy of the euro area;

Issue of euro banknotes;

Establishment of basic interest rates;

Maintaining price stability in the eurozone, i.e. ensuring that the inflation rate does not exceed 2%.

In addition, the ECB collects statistical information necessary for the performance of its tasks, either from governments or directly from economic agents.

The ECB has the power to issue legal acts, primarily regulations, and may also impose fines (art. 132 of the Treaty on the Functioning of the EU).

The relationship of the ECB with other EU institutions is built, first of all, within the framework of interaction on the basis of Art. 284 of the Treaty on the Functioning of the EU. The President of the Council of the EU and members of the Commission may take part in the meetings of the Council of the ECB. In addition, certain issues of the ECB are being coordinated with the Council of Ministers of Economy and Finance. The ECB submits its annual report to the European Parliament, the EU Council and the Commission. At the same time, the ECB is independent in matters of monetary policy both in relation to the member states and in relation to the Community. Only he is authorized to authorize the issuance of the euro. He is independent in the exercise of his powers and in the management of his finances. The ECB has legal personality (art. 282 of the Treaty on the Functioning of the EU). Control of the actions of the ECB is possible through the EU Court of Justice.

The European Central Bank is the "heir" of the European Monetary Institute (EMI), which played a leading role in the preparations for the introduction of the euro in 1999. All key issues related to the activities of the European Central Bank, such as the discount rate, accounting for bills and others, are resolved management and board of governors of the Bank.

European Central Bank (ECB)– The central bank of the euro area, as well as the foreign exchange regulator, which monitors the monetary policy of the region, and also controls the stability of the euro. It is his decisions that every first Thursday of the reporting month are especially awaited by Forex traders, because. it has a particular impact on the exchange rates of the EUR and other major currencies in the foreign exchange market.

History and tasks of the ECB

The ECB was created on June 1, 1998, becoming a logical conclusion to the long negotiations of European officials who, throughout the second half of the 20th century, sought to achieve continental unification at the financial level. In fact, the Central Bank of Europe had already existed by that time for four years, bearing the name of the European Monetary Institute. The functionaries decided to organize the Central Bank on its basis, making the German Frankfurt am Main, where the main building of the ECB is located, the main financial center of Europe.

The key task of the ECB is to maintain stable prices in the euro area, the growth of which should not exceed 2%. In addition to controlling, the European Central Bank issues euros, manages foreign exchange reserves, and also sets a range of interest rates. To perform these functions, the regulator participates in foreign exchange transactions, provides stabilization loans.

Liquidity in the eurozone money market is supported by the European Central Bank through short-term measures, such as the provision of overnight loans and the opening of deposits for the same period, which are placed temporarily free funds.

Structure and functions of the members of the ECB

ECB President Mario Draghi

The direct management of the European Central Bank is carried out by the members of the Board (Executive Board) and the Governing Council (Governing Council), headed by the President of the ECB. The composition of the Directorate is approved by the Governing Council, which has six members, four of which traditionally represent the Central Banks of the four largest economies in the eurozone - Germany, France, Italy and Spain.

The candidacy of the president or head of the ECB is proposed by the Council of the European Union, which must then be approved by the European Parliament. The manager is appointed to his position for a period of 8 years.

The main function of the head of the ECB is to implement the monetary policy determined by the Governing Council. Also, the president of the European Central Bank has great influence in approving quantitative easing programs and asset purchases. That is why his statements and speeches are closely watched by currency traders.

In its activities, the ECB is formally independent. However, every year it is obliged to report to the European Parliament, the European Commission, the Council of the European Union and the Council of Europe.

Useful links about the ECB

• Official website of the ECB: www.ecb.europa.eu

Fortrader Suite 11, Second Floor, Sound & Vision House, Francis Rachel Str. Victoria Victoria, Mahe, Seychelles

The Bank is the central bank of the European Union and the Eurozone. It is known as the most independent bank in the world. It is this financial institution that has the full right to independently resolve any issues related to the euro. The institution was founded in 1998. The first president of the financial institution was Wim Duisenberg, who was elected for a term of 5 years. In October 2003, Jean-Claude Trichet took over as the new president. Today, the leadership position belongs to Mario Draghi.

Story

After the end of World War II, the unification of Europe began. Structurization was activated and the formation of a single market space began. In the period from 1947 to 1957, the period of integration of the states of the region with the parallel emergence of the European Payment Union was successfully passed. In 1957, the largest European states united into the European Economic Community. In 1979, conditional money - ECU - was introduced into the EEC for settlements, which were immediately tied to a basket of European currencies. The memorandum on the formation of the European Monetary Area and the ECB was signed in 1988. LLC CB "Central European Bank" appeared after the signing in 1992 on the territory of Maachstricht of an international agreement on the creation of the EU, as well as after the formation of the European Monetary Institute, whose duties included preparing for the transition to a single currency - the euro.

External and internal structures

The Central European Bank has a unique management team. It includes representatives from each of the EU member states. Issues related to the work of a financial institution, bills of exchange and other issues are negotiated by the management of the institution and the board of governors. The management consists of 6 people, including the chairman of the bank and his deputy. The governing body is elected for an eight-year term. Candidates for a seat in the Directorate are nominated and considered by the European Parliament and the heads of states that are part of the European zone. The ECB is a member of the European System of Central Banks, which includes the national central banks of the EU countries. The international system operates according to a two-level algorithm. Any issue in relation to monetary policy can only be resolved if an agreement is reached at each of the levels.

General information

Since its inception in Germany, in Frankfurt, the Central European Bank has united under its leadership a whole system of European central banks. The structure includes:

• Bank of Belgium.
• Bundensbank.
• Bank of Greece.
• Bank of Spain.
• Bank of France.
• Monetary Institute of Luxembourg.

Only the ECB has the status of a legal entity, all other financial institutions included in the system play the role of auxiliary units. Their tasks are secondary. The main goal of the ECB is to prevent a sharp rise in prices and stabilize the inflation rate, which should not exceed 2%. Any decisions and actions of the bank have a direct impact on the exchange rate of the European currency against other world currencies. Sharp fluctuations are caused by a change in the interest rate and the provision of credit to the member states of the union.

What is the ECB doing?

The Central European Bank performs several dominant functions simultaneously:

• Development and implementation of monetary policy in the territory
• Provision, development and disposal of the exchange reserves of states from the euro area of ​​an official nature.
• Euro issue.
• Setting interest rates.
• Ensuring price stability in the European area.

The indicators of the ECB are the price index for goods for consumers throughout the EU, and the growth rate of which during the year should not be more than 4.5%.

Basic bank interest rates

The functions of the European Central Bank cover the determination and setting of interest rates. Interest rates can be of three types:

• Refinancing rate. This is the interest rate that determines the minimum value for applications for raising funds in a tender conducted by the ECB.
• This is the interest rate that is the base rate when placing free cash in the institutions of the ECB. The rate acts as the lower limit in the overnight interest rate market.
• Marginal borrowing rate- this is the rate at which the banks of the ESB structure can get a loan, which is necessary to maintain short-term liquidity. The marginal rate acts as the upper limit of the range within the overnight interest rate market.

By setting these types of rates, the Central European Bank creates the demand or supply of the currency, ensures its stability and controls the cash flows within the zone.

General provisions

The Central European Bank is a unique legal entity whose work is based on international agreements. The authorized capital of the institution at the time of its creation was equal to 5 billion euros. The largest banks in Europe acted as shareholders. The German Bundesbank contributed 18.9% of the capital, the Bank of France - 14.2%, the Bank of Italy - 12.5%, the Bank of Spain - 8.3%. The remaining Central Banks of the European states contributed from 0.1% to 3.9% of the initial authorized capital. The executive board, which was mentioned above, manages the activities of the financial institution - it is headed by the chairman of the European Central Bank. The main feature of a financial organization is complete independence. At the same time, the institute is obliged to submit an annual report on its activities to the European Parliament, the European Commission, the Council of the European Union and

Activity policy

To achieve its objectives, the ECB uses such instruments as stabilization loans and loans-for-shares auctions, foreign exchange transactions and open market transactions. The most powerful tool for regulating the financial market is the rate of the European Central Bank. The work of the monetary institution is based on the principles of independence from other states, as well as from the ruling bodies of the supranational type. The work of the latter primarily provides for the absence of coercion when covering the external and internal debt. For a decision to be made on each specific resolution, a majority of the members of the management board must vote for it. Each of them has only one opportunity to vote. The head of the European Central Bank must follow the advice of the council. Only after a certain decision has been made, the central banks of European states can be actively involved in its implementation.

Powers of the ECB and National Central Banks

The ECB, in joint efforts with the Central Bank of the member states of the association, has the right to form relations with the Central Bank of other states, and, if necessary, with international organizations. Opportunities are open for the acquisition, sale and forward of any type of assets, including banking metals. The concept of "currency assets" includes securities in any currency and in any units of calculation. Ownership and management of assets is allowed. The ECB conducts a wide range of banking organizations of any type, for which international organizations, representatives of a third party can act as partners. Partnerships may include borrowing and lending operations. In addition to the main functions mentioned above, the European Bank, in cooperation with the Central Bank of European countries, can conduct operations with an administrative purpose, as well as act in the interests of board members. An important stage in the regulation of the bank's activities can be called the formation of the European Monetary System, which began its existence in 1979.

European Monetary System within the ECB

The refinancing rate of the European Central Bank is not the only thing that affects the European Monetary System. The EBU itself has a number of specific tasks. We can talk about the following areas:

• Ensuring monetary stability within the EU.
• Maximum simplification of convergence processes with active economic development.
• Under conditions of stability, the monetary system provides a growth strategy.
• Stable systematization of currency and economic relations of an international nature.

It was thanks to the introduction into circulation of such a monetary unit as the ECU that the states of the European Union successfully coped with the crisis of the 80s. After the victory over the process of inflation, restrictions on the conduct of current financial transactions were lifted. Since 1990, the regime of free flow of capital has been activated. Initially, the goal of the EU was to provide optimal conditions for the movement of goods and services, capital and labor. The ECB was created to encourage the introduction of a common currency, a single citizenship. Its work, even at the planning stage, was supposed to help form organizational and legal mechanisms for coordinating not only foreign policy, but also the security policy of each participating state.