ECB

The European Central Bank (ECB) is the central bank for the euro and the main monetary authority of the euro area. It was established in 1998 by the Maastricht Treaty and is headquartered in Frankfurt, Germany. It forms the Eurosystem together with the national central banks of euro-area countries, and together they constitute the European System of Central Banks (ESCB). The ECB's primary objective is price stability in the euro area, defined as keeping inflation at a rate sufficiently close to 2 percent over the medium term, while supporting economic growth and employment. It also contributes to financial stability and the smooth operation of payment systems.

Governance: The decision-making bodies are the Executive Board and the Governing Council. The Executive Board comprises the President, the Vice-President, and four other members; the Governing Council includes the Executive Board and the central bank governors of euro-area member states. The General Council, consisting of the President, the Vice-President, and the central bank governors of all EU member states, serves in a consultative and assisting capacity. The ECB is independent from direct political influence; its independence is guaranteed by the EU treaties.

Monetary policy and tools: The ECB sets key interest rates, defines monetary policy, and uses instruments such as refinancing operations, the deposit facility, asset purchase programs, and liquidity-providing measures when needed. It also conducts foreign-exchange operations and manages foreign reserves for the Eurosystem. Since 2014, the Single Supervisory Mechanism assigns significant bank supervision to the ECB in cooperation with national authorities.

Banknotes: The ECB holds the exclusive right to authorize euro banknotes; production is distributed among the ECB and national central banks.

Membership: The euro area comprises 20 EU member states that use the euro as their currency. The ECB’s policies apply to those members and, through EU institutions, influence broader European financial policy.