Was established 1 June 1998 and located in Frankfurt (Germany)
The European Central Bank is the body with the help of which the European Union has implemented its tasks outlined founding Treaty of Rome on the implementation of policies in the field of monetary relations.
The European Central Bank is independent in its work and has the status of a legal entity.
The European Central Bank is composed of the role of national central banks of the member states determined on the basis of gross national product and population of the member states.
The biggest part of the role of more than 2/3 provide central banks of the European System of Central Banks, to a lesser extent the national central banks of the Member States of the European Union that are not within the Eurosystem.
Significant is the fact that the European Central Bank shall determine the amount of financial obligations of the national central banks of the Member States of the European Union, which are outside the Eurosystem. This means that the mandatory deposit of foreign exchange reserves of national banks that are not part of the Eurosystem.
Such mechanisms provide the stability of the common currency (the euro currency). Shall be deposited reserves lesser extent in gold and mainly in US dollars.
For the national central banks of the Member States belonging to the Eurosystem, and which are part of the system of European Central Bank stipulates the obligation of depositing foreign currency reserves in European banks.
The European Central Bank is a bank that finances the National Bank of Member States and which are not part of the Eurosystem, but they are part of Europe.
The European Central Bank and the national central banks together constitute the Eurosystem, the central banking system of the euro area. The main objective of the Eurosystem is to maintain price stability: safeguarding the value of the euro.
The European Central Bank is responsible for the prudential supervision of credit institutions located in the euro area and participating non-euro area Member States, within the Single Supervisory Mechanism, which also comprises the national competent authorities. It thereby contributes to the safety and soundness of the banking system and the stability of the financial system within the EU and each participating Member State.
We at the European Central Bank are committed to performing all our tasks effectively. In so doing, we strive for the highest level of integrity, competence, efficiency and accountability. We respect the separation between our monetary policy and supervisory tasks. In performing our tasks we are transparent while fully observing the applicable confidentiality requirements.
The tasks of the European System of Central Banks (ESCB) and the Eurosystem are laid down in the Treaty on the Functioning of the European Union. They are specified in the Statute of the European System of Central Banks and of the European Central Bank. The Statute is a protocol attached to the Treaty.
The Treaty on the Functioning of the European Union generally refers to the ESCB rather than to the Eurosystem, since it was drawn up on the premise that all EU Member States would eventually adopt the euro. The Eurosystem is made up of the ECB and the national central banks (NCBs) of the EU Member States whose currency is the euro, whereas the ESCB comprises the ECB and the NCBs of all EU Member States (Article 282(1) of the Treaty). As long as there are EU Member States whose currency is not the euro, it will be necessary to make a distinction between the Eurosystem and the ESCB.
Article 127(1) of the Treaty defines the primary objective of the Eurosystem:
"The primary objective of the European System of Central Banks […] shall be to maintain price stability".
It continues as follows: "Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union as laid down in Article 3 of the Treaty on European Union."
The European Union has multiple objectives (Article 3 of the Treaty on European Union), which include the sustainable development of Europe based on balanced economic growth and price stability, and a highly competitive social market economy, aiming at full employment and social progress. Consequently, price stability is not only the primary objective of the ECB’s monetary policy, but also an objective of the European Union as a whole. Thus, the Treaty on the Functioning of the European Union and the Treaty on European Union establish a clear hierarchy of objectives for the Eurosystem, making it clear that price stability is the most important contribution that monetary policy can make to achieving a favourable economic environment and a high level of employment.
References: Web: https://www.ecb.europa.eu Retrieved on 2 September 2015.