The European Central Bank (ECB) and the Federal Reserve System (FED)

Résumé du document

This document is a presentation of the European Central Bank (ECB). The national central banks (NCB) make part of the ESCB Headquarters based in Frankfurt Presentation of the FED, which was created in 1913 by the enactment of the Federal Reserve Act and headquartered in Washington D.C. The following information will be discussed in the document: The legal basis of the European Community Treaty and the statute of the European System of Central Banks (ESCB) and of the European Central Bank.

Extraits

[...] BERNANKE Vice-President: Donald L. KOHN 5 other members Photo of Ben S. [...]

[...] Government and depository institutions III Tasks of the FED The definition and implementation of the monetary policy (ensure price stability, full employment and must facilitate growth in the US) Establish Federal Reserve balance sheet Regulate banking activities IV Tools of the FED Open market operations Discount rates Reserve requirements V Criticisms According to the Austrian school, the Federal Reserve is an unnecessary and counterproductive interference in the economy Some critics are still in favour of the gold standard Some critics argue that the Fed lacks accountability and transparency and that there is a culture of secrecy within the Reserve System The FED has no power concerning the external value of its currency (US dollar) Comparison between the FED and the ECB policies On the one hand, the policy of the Fed, consisting of low interest rates, has kept credit cheap On the other hand, the European Central Bank has followed a more restrictive monetary policy Thank you for your attention. [...]

[...] BernankePhoto of Donald L. Kohn II Organisation of the FED Responsibilities Oversee System operations Make regulatory decisions Set reserve requirements II Organisation of the FED Federal Open Market Committee (FOMC) 7 members of the Board of Governors 5 out of the 12 Federal Reserve Bank presidents serve as voting members on a rotating basis II Organisation of the FED Responsibilities Establish the monetary policy (ensure price stability, full employment and must facilitate growth in the US) Organise meetings II Organisation of the FED Federal Reserve Banks 12 regional banks Each independently incorporated with a 9-member board of directors from the private sector II Organisation of the FED Responsibilities Set discount rate, subject to approval by the Board of Governors Monitor economy and financial institutions in their districts and provide financial services to the U.S. [...]

[...] . The European Central Bank (ECB) and the Federal Reserve System (FED) 399px-Logo_European_Central_BankImage:US-FederalReserveSystem-Seal.svg I Presentation of the ECB General Information Established in 1998 (first of june) Legal basis : the European Community Treaty and the statute of the European System of Central Banks (ESCB) and of the European Central Bank ECB and the national central banks (NCB) make part of the ESCB Headquarters based in Frankfurt II Organisation of the ECB The Executive Board President: Jean-Claude Trichet Vice-President: Lucas D. [...]

[...] Papademos 4 other members Image: zoom_ecborgadecisionsebsharedimgexecutiveboardjpgecborgadecisionsebsharedimgexecutiveboardHRjpg500357_clip --]executiveboard_HR II Organisation of the ECB Responsibilities Prepare Governing Council meetings Implement monetary policy Manage the day-to-day business of the ECB Exercise certain powers delegated to it by the Governing Council II Organisation of the ECB Governing Council Main decision-making body 6 members of the executive board 15 governors of the National Central Banks of the Euro Area countries The Governing Council meets once a fortnight II Organisation of the ECB Responsibilities Adopt the guidelines Take the necessary decisions to ensure the performance of the tasks entrusted to the Eurosystem Formulate monetary policy for the euro area II Organisation of the ECB General Council President of the ECB Vice-President of the ECB The 27 governors of the national central banks of the European Union Members of the General Council of the European Central Bank [jpeg 65kB] II Organisation of the ECB Responsibilities The ECB's advisory functions The collection of statistical information The preparation of the ECB's annual reports The laying-down of the conditions of employment of the members of staff of the ECB The necessary preparations for irrevocably fixing the exchange rates of the currencies of the EU Member States III Tasks of the ECB Basic tasks The definition and implementation of monetary policy for the euro area The conduct of foreign exchange operations The holding and management of the official foreign reserves of the euro area countries (portfolio management) The promotion of the smooth operation of payment systems III Tasks of the ECB Further tasks Authorise the issuance of banknotes within the euro area Collect statistical information necessary for fulfilling the tasks Contribute to the smooth conduct of policies pursued by the authorities and the stability of the financial system IV Tools of the ECB Open market operations Standing facilities - Marginal lending facility - Deposit facility Minimum reserves V Objectives of Monetary policy Maintain price stability Keep inflation low Long-run neutrality of money Increase economic welfare Keep the unemployment rate low VI Criticisms Reaction time between taking and implementing decisions is too long Heterogeneity of members of the European Union in terms of inflation and interest rates makes it more difficult to implement monetary policy According to Milton Friedman : each member of the Euro Area has different concerns depending on its own country The French president Nicolas Sarkozy thinks that the exchange rate of the Euro is overvalued and that ECB does not react to this failure I Presentation of the FED General Information Created in 1913 (December 23rd) by the enactment of the Federal Reserve Act Headquarters based in Washington D.C. II Organisation of the FED Board of Governors President : Ben S. [...]