European Central Bank researchpaper

European Central Bank

European Central Bank (ECB) the bank head quartered in Frankfurt, Germany is the central bank that manages the Euro with the mandate to administer and implementing financial policy of the Eurozone. It manages The Euro single currency and checks the price stability in the 18 EU member states.

ECB is among the most important central banks and it is listed in the treaty of European Union. The main purpose of European Central Bank is to:

  • Ensure it has kept the prices stable in all the states that use the Euro currency. The bank ensures it has controlled inflation.
  • Stabilizing all the financial systems by ensuring the financial markets are well supervised.

All the central banks in all the 28 European Union countries works closely with the ECB forming the European System of Central Banks (ESCB).The European Central Bank, has the following major roles to play;

  • Money supply and interests rates in the Eurozone are controlled by the bank
  • Helps keep exchange rate in balance by managing buying and selling of currencies and managing foreign currency reserves in the Eurozone.
  • All the central banks in the Eurozone issue euro banknotes through the authorization of the bank.
  • Risk assessment and monitoring price trends and the effects to the price stability