The governing bodies of the ECB
The Treaty establishes the ESCB's primary purpose as that of maintaining price stability, and, notwithstanding the former, "supporting the Community's general economic policies".
The General Council was set up as a third governing body of the ECB, whilst there are Member States that have not adopted the euro as their currency.
The duties of the governing bodies are established in the European Union Treaty, in the ESCB's Statute and the corresponding Internal Regulations.
The Governing Council
This is the supreme governing body of the ECB and is made up of all the members of the Executive Board and the Governors of the NCB's of the countries that have adopted the euro.
Its main responsibilities are:
- To adopt the guidelines and make the decisions necessary to ensure the performance of the duties entrusted to the ESCB;
- To draft monetary policy for the Eurozone including, when appropriate, decisions related to intermediate monetary objectives, basic interest rates, the supply of reserves in the Eurosystem, and the establishment of guidelines to implement said decision.
When adopting decisions on monetary policy and other functions of the Eurosystem, the members of the Governing Council do not act as representatives of their respective countries, but as fully independent individuals.
The Governing Council usually meets every two weeks at the ECB headquarters in Frankfurt (meetings may also be held by teleconference). Additionally, two annual meetings are held in a country within the Eurozone.
The first meeting held outside of Frankfurt took place in Madrid, at the Bank of Spain head office on 30 March 2000.
The Executive Board
The Executive Board is made up of the Chairman and Vice-Chairman of the ECB, together with four members appointed by mutual consent by the governments of the participating Member States.
Its main responsibilities are:
- To prepare Governing Council meetings,
- To implement the monetary policy in accordance with the decisions made by the Governing Council and, in so doing, give the necessary instructions to the Eurozone NCBs,
- To manage the ECB's day-to-day business.
- To exercise certain powers delegated to it by the Governing Council, including some of a regulatory nature.
The Executive Board usually meets once a week to decide on the implementation of the monetary policy, prepare the Governing Council meetings and deal with internal matters of the ECB.
The General Council
The General Council is made up of the Chairman and Vice-Chairman of the ECB, together with all the Governors of the NCBs of both participating and non-participating Member States.
It has taken over the duties carried out by the European Monetary Institute, which, due to the fact that not all the Member States have adopted the euro, the ECB must continue to perform in the third stage of the Economic and Monetary Union. These duties include: informing on the progress made by non-participating Member States towards convergence, as well as consultancy on all the necessary preparations to irrevocably fix their currency exchange rates.
Additionally the General Council collaborates in certain ESCB activities, carrying out advisory functions and compiling statistical data.
| Composition | Election of Members | Term | Responsibilities | |
|---|---|---|---|---|
| GOVERNING COUNCIL |
|
Pursuant to the legislation of each country | No less than 5 years | Decisions on monetary policy |
| EXECUTIVE BOARD |
|
Member States, by mutual agreement | 8 years, with no possibility of re-election | Start-up of the monetary policy, as per instructions from the Governing Council |
| GENERAL COUNCIL |
|
Monitoring the monetary and currency exchange policies of non-EMU countries |
Decision-making
Each member of the different bodies described have one vote for decision-making and, in most cases, decisions are adopted by simple majority.
The above excludes decisions related to assets, capital, currency reserve transfers or any other decisions that require a special majority, in which case the votes of the representatives of the Central National Banks are weighted in accordance to their share in ECB's capital.