The European System of Central Banks

Résumé du document

The European System of Central Banks (ESCB) is composed of the European Central Bank (ECB) and the National Central Banks (NCB's) of all 15 EU Member States. The "Eurosystem" is the term used to refer to the ECB and the NCBs of the Member States who have euro as their national currency. The NCB's of the Member States which are yet to adopt euro as their national currency have the privilege to become the members of ESCB with a special status. The primary objective of the Eurosystem is to maintain price stability with the aid of European Community and the Statute of the European System of Central Banks and the European Central Bank. Without prejudice to this objective, it shall support the general economic policies in the Community and act in accordance with the principles of an open market economy.

Extraits

[...] The European System of Central Banks Introduction The European System of Central Banks (ESCB) is composed of the European Central Bank (ECB) and the national central banks (NCBs) of all 15 EU Member States. The "Eurosystem" is the term used to refer to the ECB and the NCBs of the Member States which have adopted the euro. The NCBs of the Member States which do not participate in the euro area, however, are members of the ESCB with a special status while they are allowed to conduct their respective national monetary policies, they do not take part in the decision-making with regard to the single monetary policy for the euro area and the implementation of such decisions. [...]

[...] The reserve requirement of each institution is determined in relation to elements of its balance sheet. In order to pursue the aim of stabilising interest rates, the Eurosystem's minimum reserve system enables institutions to make use of averaging provisions. This implies that compliance with the reserve requirement is determined on the basis of the institutions' average daily reserve holdings over a one-month maintenance period. The required reserve holdings are remunerated at a level corresponding to the average interest rate over the maintenance period of the main refinancing operations of the Eurosystem. [...]

[...] The Statute makes provision for the following measures to ensure security of tenure for NCB governors and members of the Executive Board minimum renewable term of office for governors of five years, a minimum non-renewable term of office for members of the Executive Board of eight years and removal from office is only possible in the event of incapacity or serious misconduct) The ECB's capital amounts to EUR 5 billion The NCBs are the sole subscribers to and holders of the capital of the ECB. The subscription of capital is based on a key established on the basis of the EU Member States' respective shares in the GDP and population of the Community. It has, thus far, been paid up to an amount just under EUR 4 billion. [...]

[...] This consists of three main elements: a quantitative definition of price stability, and the "two pillars" used to achieve this objective. These two pillars are a prominent role for money, as signalled by the announcement of a quantitative reference value for the growth rate of a broad monetary aggregate, and a broadly based assessment of the outlook for price developments and risks to price stability in the euro area as a whole. Monetary policy instruments and procedures The operational framework consists of a set of instruments. [...]

[...] It is possible to execute open market operations on the basis of standard tenders, quick tenders or bilateral procedures. With regard to their aim, regularity and procedures, the open market operations of the Eurosystem can be divided into the following four categories: refinancing operations (regular liquidity-providing reverse transactions with a weekly frequency and a maturity of two weeks), the longer-term refinancing operations (liquidity- providing reverse transactions with a monthly frequency and a maturity of three months), fine-tuning operations (managing the liquidity situation in the market and steering interest rates, in particular in order to smooth the effects on interest rates caused by unexpected liquidity fluctuations and structural operations (the issuance of debt certificates, reverse transactions and outright transactions) . [...]