EZB

EZB is the abbreviation for the Europäische Zentralbank, the central bank responsible for the monetary policy of the euro area, and a key part of the European System of Central Banks (ESCB). The term is used mainly in German and other languages to refer to the European Central Bank (ECB) and its euro-area activities. The EZB coordinates with the national central banks of EU member states that use the euro.

The EZB was established under the EU treaties to ensure price stability in the euro area. It began operations in 1998, in preparation for the introduction of the euro, and by 2002 the euro banknotes and coins were in use. The bank’s primary objective is to maintain price stability over the medium term, defined as keeping inflation rates close to 2 percent, while supporting the broader economic policies of the European Union.

The EZB’s decision-making body is the Governing Council, which includes the President and Vice-President of the bank plus the governors of the national central banks of the euro area. The Executive Board handles daily operations, and the General Council includes representatives from EU member states outside the euro area. The EZB uses a range of monetary policy tools, such as key interest rates, liquidity operations, and asset purchases. Since 2014, banking supervision for most euro-area banks has been carried out by the Single Supervisory Mechanism, under the ECB’s mandate.

Headquartered in Frankfurt, Germany, the EZB operates independently within the EU framework and reports to European Union institutions, balancing national interests with the objective of price stability and financial system stability across the euro area.