P3; CH8: The European Central Bank / The Court of Auditors Flashcards
What’s the European Central Bank?
It’s an independent institution headquartered in Frankfurt with the aim to carry out the task of formulating & implementing the Union’s monetary policy + protecting the ESCB (European System of Central Banks)
It enjoys legal personality
What’s the ESCB
- European System of Central Banks comprehend 27 central banks of the EU + ECB
- Differs from the EURO-SYSTEM (that comprehends only the 20 states that adopted the euro currency)
How is the ECB divided?
The ECB is divided in several bodies, such as:
1. Executive Board
2. Governing Council
3. Supervisory Board
4. General Council
What’s the Executive Board of the ECB?
Permanent body that manages the bank on a daily basis + implements the Governing Council monetary policies guidelines
[6 members: pres+vice+4 other among excellent in the economic sector, appointed by the Council with QM; 8 years mandate]
What’s the Governing Council of the ECB?
It formulates and sets the monetary policy of the eurozone
[Executive board + governors of the national banks of the euro area]
What’s the Supervisory Board of the ECB?
Ensures the supervisory task of the ECB
What’s the General Council of the ECB?
A supportive and consultative body , mainly operating in the euro currency exchange rate matters
What are the functions of the ECB?
The ECB:
- Pursues price and banking system stability
- Supervises banks and financial institutions
- Pursues the objectives of the Union through monetary policies
- Exercises a power of legislative initiative and control
- Sets the reference interest rate for the eurozone
- Holds and manages the foreign currency reserves
- Ensures the correct functioning of the payment system
- Monitor price trends
- Authorizes national banks to issue euro banknotes
What’s the Court of Auditors?
Institution tasked with auditing the Union’s account
Composed of one member per Ms
Has a mandate of 6 years
