European Central 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 has every right to decide all matters related to the euro.The institution was founded in 1998.The first president of the financial institution was Wim Duisenberg, who was chosen for a term of 5 years.In October 2003, as the new president took Jean-Claude Trichet.Today, the leading position belongs to Mario Draghi.
history
After the Second World War began the unification of Europe.It activated structuring and formation of a single market space.In the period from 1947 to 1957, it was successfully performed during the integration of the region with the parallel emergence of the European Payments Union.In 1957, there is an association of the largest European countries in the European Economic Community.In 1979 the EEC introduced conditional money - ECU - for settlements that were once tied to a basket of European currencies.The memorandum on the formation of the European currency area, and the ECB was signed in 1988.CB "Central European Bank" appeared after the signing in 1992 on the territory of Maahstrihta the international treaty establishing the European Union, and after the formation of the European Monetary Institute, which was responsible for preparing the transition to a single currency - the euro.
External and internal structure
European Central Bank has a unique management team.It includes representatives from each of the EU Member States.Questions concerning the operation of a financial institution, interest rates, promissory notes and other things, specifies the Directorate of institutions, and the Board of Governors.The management consists of 6 people, with the chairman of the bank, and his deputy, inclusive.Authority of the Board on an eight-year term is chosen.Candidates for the position in the Directorate are nominated and considered by the European Parliament and the heads of states that are part of the euro zone.The ECB is a member of the European System of Central Banks, which includes National Bank of the European Union.The international system operates on the two-level algorithm.Any question as to the monetary policy be settled only if each of the levels will be agreed.
General
Central European Bank since its inception in Germany, in Frankfurt, united under the leadership of the whole system of European central banks.The composition structure includes:
- Bank of Belgium.
- Bundensbank.
- Bank of Greece.
- the Bank of Spain.
- Bank of France.
- Luxembourg Monetary Institute.
status of a legal entity is only the ECB, all other financial institutions included in the system, play the role of auxiliary units.Their secondary task.The main objective of the ECB is to prevent the sharp rise in prices and the stabilization of inflation, which should not exceed 2%.Any decisions and actions of the bank have a direct impact on the euro exchange rate against other currencies of the world.Sharp fluctuations cause changes in interest rates and lending to Member States of the Union.
What does the ECB?
Central European Bank performs multiple dominant functions:
- Development and implementation of monetary policy in the euro-zone area.
- Maintenance, development and management of the exchange reserves of the euro zone official.
- emissions euros.
- setting interest rates.
- Ensuring price stability in the euro zone.
indicators of the ECB are the index of the prices of goods for consumers throughout the EU, and the size of the money supply, the growth of which in the course of the year should not be more than 4.5%.
main bank interest rates
functions of the European Central Bank covering the identification and interest rates.Interest rates can be of three types:
- refinancing rate. is the interest rate, which determines the minimum value at the request of attracting material resources in the tender held by the ECB.
- rates on deposits. is the interest rate, which is the base when placing available funds in the institutions of the European Central Bank.The rate acts as the lower boundary of the market interest rates overnight.
- Reserve rate on loans - is the rate at which banks in the structure of the ESS can get a loan, which is necessary to maintain short-term liquidity.Marginal rate plays the role of the upper limit of the range within the framework of market interest rates overnight.
installing these types of rates, the European Central Bank creates demand or supply of currency, ensures its stability and controls cash flows within the zone.
General
European Central Bank is a unique legal education, whose work is based on international agreements.The authorized capital of the institution at the time of its creation was equivalent to 5 billion euros.In the role of the shareholders were the biggest banks in Europe.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 rest of the European Central Bank contributed 0.1% to 3.9% of the initial share capital.Supervises the activities of the financial institution's executive board, which was mentioned above - at its head is the chairman of the European Central Bank.The main feature of the financial organization - is a complete independence.At the same time the Institute is obliged to submit a report each year on its activities to the European Parliament, the European Commission, the Council of the European Union and the Council of Europe.
policy activities
To implement its tasks the European Central Bank uses tools such as stabilization loans and loans auctions, foreign exchange operations and transactions on the open market.The most powerful tool of financial market regulation - is the rate of the European Central Bank.Work monetary institution based on the principles of independence from other states, as well as the decisions of a supranational type.Work latter primarily involves coercion by overlapping external debt and internal.To make a decision on each specific decree for it must cast a vote, most members of the administrative council.Each of them has only one opportunity to vote.The head of the European Central Bank should follow the opinion of the Board.Only after the adoption of specific solutions to its implementation can be actively involved the central banks of European countries.
Powers of the ECB and the national central banks
with the joint efforts of the ECB to the Central Bank of the States Parties association has the right to form relationships with other countries of the Central Bank and, if necessary, and with international organizations such as.It opens the possibility for the purchase, sale and forward all types of assets, including bullion.The concept of "hard assets" includes securities in any currency and in any units of calculation.Allowed to own and manage assets.The ECB conducts a wide range of banking organizations of any type, as partners who can speak the international organizations, representatives of a third party.Partnerships can provide loans and credit operations.Besides the basic functions mentioned above, the European Bank in collaboration with the European Central Bank may conduct transactions with the administrative purpose, and to act in the interests of government.An important step in the decision 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 framework of the ECB
refinancing rate of the European Central Bank - is not the only thing that affects the European Monetary System.EBU and itself has a number of specific objectives.You can talk about the following areas:
- providing currency stability within the EU.
- maximum simplification of the processes of convergence with the active economic development.
- in a stable monetary system provides a growth strategy.
- systematization stable currency and economic relations of an international character.
It is thanks to the introduction into circulation of such currency as the ecu, the state of the European Union coped with the crisis of the 80s.After the victory over the process of inflation were removed restrictions on current financial transactions.Since 1990, the mode is enabled the free flow of capital.Initially, the aim of the EU was to provide optimal conditions for the movement of goods and services, capital and labor.The ECB was created to stimulate the introduction of a common currency, a single citizenship.His work is still at the planning stage was to help develop the institutional and legal mechanisms for the coordination, not only foreign policy, but also the security policy of each State Party.
