European central bank (ECB)
European central bank (ECB) |
European Central Bank was established on January 1, 1999 and its headquarters is in Frankfurt, Germany. The primary objective of the ECB is to maintain price stability within the euro area i.e. to keep inflation below 2%.
The European system of central banks consists of the ECB and local central banks:
- National bank of Belgium (Banque Nationale de Belgique), Governor Guy Quaden
- Bundesbank (Deutsche Bundesbank), Governor Axel A. Weber
- Bank of Greece, Governor Nicholas C. Garganas
- Bank of Spain (Banco de Espana), Governor Miguel Fernandez OrdN?ez
- Bank of France (Banque de France), Governor Christian Noyer
- The Central Bank of Luxembourg (Banque Centrale du Luxembourg)The head of the ECB is its Chairman (in 2007 Jean-Claude Trichet).
Decisions on all key issues (such as interest rate, discounting etc.) of the European Central Bank are made by the Executive Board of Directors and the Governing Council.
Executive Board of Directors
The Executive Board consists of 6 people, including the ECB Chairman and the Deputy Chairman of the ECB. Board members are nominated by the Governing Council and are commissioned by the European Parliament and by heads of states participating in the Euro area. The Chairman is elected for an 8-year term.
- Jean-Claude Trichet, Chairman of the ECB
- Lucas D. Papademos, Vice-President of the ECB
- Lorenzo Bini Smaghi, Member of the Executive Board of the ECB
- Jose Manuel Gonzalez-Paramo, Member of the Executive Board of the ECB
- Jurgen Stark, Member of the Executive Board of the ECB
- Gertrude Tumpel-Gugerell, Member of the Executive Board of the ECB
Governing Council
The Governing Council consists of the six members of the ECB Executive Board, plus the governors of the national central banks. Usually, four out of six members represent four major central banks: France, Germany, Italy, Spain.
Only those council members who are present in person or via video conference have a vote. A council member can appoint his substitute if not able to attend the meetings for a long time.
The presence of two thirds of Council members is necessary for a vote, although there is no such limit for an emergency meeting. Decisions are made by simple majority with the Chairman having a deciding vote. On issues of ECB capital, profit distribution, etc. countries have votes proportional to national bank shares in the ECB registered capital.
