The European Central Bank

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • The European Central Bank
  • Background to the ECB
  • Organisation of the ECB
  • Objectives of the ECB
  • Purpose of the ECB
  • ECB as part of the Single Supervisory Mechanism
  • The UK and the ECB
  • Criticisms of the ECB

The European Central Bank

The European Central Bank (ECB) represents the core institution for the Eurosystem and the European System of Central Banks (ESCB). The ECB became the successor of the European Monetary Institute on 1 June 1998, and assumed its full responsibility for the monetary policy decision making for the euro zone on 1 January 1999. In 2014, the ECB assumed full responsibility and supervisory tasks for the banks in Member States participating in the Single Supervisory Mechanism.

The ECB works in conjunction with the European Supervisory authorities, especially the European Banking Authority (EBA). The main task of the EBA is to contribute to the creation of the European Single Rulebook in banking whose objective is to provide a single set of harmonised prudential rules for financial institutions throughout the EU. 

Background to the ECB

The ECB was established by Article 8 of the Treaty on the Functioning of the European Union as a specialised and independent organisation for conducting monetary policy. The ECB, alongside the national central banks of Member States that have adopted the euro constitute the Eurosystem, which acts as the monetary authority for the euro zone. The ESCB is formed of the ECB and national banks of all EU Member States. The ECB is a supra-national institution and was granted its own legal personality under public international law. This extensive legal capacity allows

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