What does the European Central Bank do?
The ECB’s main task is to maintain price stability in the euro area. To achieve this it aims to keep the inflation rate at under 2%, by controlling the money supply and monitoring price trends in the euro area. The ECB controls the money supply by, amongst other things, cutting or raising interest rates. The ECB also conducts foreign exchange operations, and ensures the smooth operation of payment systems between banks. How is the European Central Bank organised? The bank has three decision-making bodies: The Executive Board The Executive Board comprises of the president of the ECB, the vice-president, and four further members. All members are appointed by the presidents or prime ministers of the euro area countries for non-renewable terms of eight years. The Executive Board is responsible for the day-to-day management of the ECB. It implements monetary policy, formulated by the Governing Council (see below), and issues instructions to the national central banks within the euro area. T
