European Central Bank


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European Central Bank (ECB)

Bank created to monitor the monetary policy of the countries that have converted to the Euro from their local currencies. The original 11 countries are: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain.

European Central Bank

The central bank for the eurozone. It was established in 1998 prior to the introduction of the euro in 1999. It issues the euro and sets monetary policy, especially by setting key interest rates. Raising interest rates is how the ECB reduces the amount of money in the economy, which slows unsustainable growth and curbs inflation. Lowering interest rates increases the amount of money in the economy and is used to spur growth.

The ECB is independent of all other government bodies of the European Union and its member states. It is governed by an Executive Board and Governing Council. The Governing Council is the highest body; it consists of members of the Executive Board and heads of the central banks of the states participating in the eurozone.

European Central Bank (ECB).

The European Central Bank is the central bank of the European Monetary Union (EMU), whose member countries use the euro as their currency.

The ECB, which is based in Frankfurt, Germany, issues currency, sets interest rates, and oversees other aspects of monetary policy for the EMU.

The EMU's National Central Banks (such as the Banque de France and the Deutsche Bundesbank), together with the ECB, form the European System of Central Banks. They play an important role in implementing monetary policy, conducting foreign exchange operations, and maintaining the foreign reserves of member states.

European Central Bank (ECB)

the CENTRAL BANK set up in July 1998 by the EUROPEAN UNION (EU) in the run-up to the establishment of ECONOMIC AND MONETARY UNION (EMU) in January 1999. Under EMU, the European Central Bank was given centralized powers to set INTEREST RATES and responsibility for determining monetary policy in the EMU-zone (currently comprising 12 of 15 member countries of the EU). The ECB oversees the operation of the EURO, EMU's single currency, and is the sole issuing authority of Euro banknotes and coins. The ECB's primary objective is to maintain a low INFLATION rate in the EMU-zone (a target inflation rate of 2% is the current goal). Interest rates are set and managed with the inflation target in mind. Inflation has remained low in recent years (see INFLATION entry) and with an economic downturn affecting many of the EU countries the ECB has been under pressure to reduce interest rates. Between 2001 and 2004 interest rates were reduced – from 4.75% to (as at March 2005) 2%.

The ECB, which is based in Frankfurt, Germany, is managed by an executive board of six members drawn from EMU countries, including the Bank's President. Overall policy is set by a Supervisory Board that consists of these six plus the 12 central bankers of the 12 EMU members.

European Central Bank (ECB)

the CENTRAL BANK set up in July 1998 by the EUROPEAN UNION (EU) in the run-up to the establishment of ECONOMIC AND MONETARY UNION (EMU) in January 1999. Under EMU, the European Central Bank was given centralized powers to set INTEREST RATES and responsibility for determining monetary policy in the EMU-zone (currently comprising 12 of the 25 member countries of the EU). The ECB oversees the operation of the EURO, EMU's designated single currency, and became the sole issuing authority of Euro bank notes and coins when these were introduced in 2002 to replace the individual domestic currencies of member countries of EMU.

The ECB's primary objective is to maintain a low INFLATION rate in the EMU-zone (a target inflation rate of 2% is the current goal). Interest rates are set and managed with the inflation target in mind. Currently (as at April 2005) the EMU-zone interest rate is 2%.

The ECB, which is based in Frankfurt, Germany, is managed by an executive board of six members drawn from EMU countries, including the Bank's President. Overall policy is set by a Supervisory Board that consists of these six plus the 12 central bankers of the 12 EMU members. See TAYLOR RULE.

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He started with the temporary bail-out fund, the European Financial Stability Facility, he then managed to perpetuate it in the shape of the European Stability Mechanism, and he now pushes for a "Single Supervisory Mechanism" under the roof of the European Central Bank.
The European Central Bank opened in Frankfurt in 1998 and the new euro was launched in 1999 as a "virtual" currency -- used by banks, businesses, and governments.
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The report also includes clear and concise explanations of how the future European Central Bank will function.
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The European Commission and the European Central Bank representatives upon their visit to Latvia praised country's overall macroeconomic situation, yet, observed slow pace of some important reforms.

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