European Central Bank. European Central Bank (ECB) The European Central Bank (ECB) began operations in

European Central Bank

European Central Bank(ECB, European Central Bank, ECB) is a financial institution of the European Union that regulates the monetary policy of member countries of the euro area. The headquarters is located in Frankfurt am Main, Germany.

The ECB was officially established in 1998 on the basis of the 1997 Amsterdam Agreement. However, the process of its creation began quite a long time ago.

After World War II, the unification of Europe and the formation of a single market space began. In 1947–1957, the states of the region were integrated and the European Payments Union emerged.

In 1957, the largest countries in Europe united to form the European Economic Community (EEC). In 1979, the conventional monetary unit ECU was introduced for mutual settlements, the rate of which was tied to a basket of European currencies.

In 1988, a memorandum “On the creation of the European Monetary Area and the European Central Bank” was signed. In 1992, an international treaty establishing the European Union was concluded in Maachtricht. In January 1994, in accordance with this agreement, the European Monetary Institute was formed in Frankfurt am Main, whose tasks included preparing for the transition to a single currency, the euro. And in 1998 it was transformed into the European Central Bank.

Today, the ECB is a special legal entity operating on the basis of international agreements. Its authorized capital at its creation amounted to more than 5 billion euros; the shareholders are the central banks of European countries. The largest contributions were made by the Deutsche Bundesbank - 18.9%, the Bank of France - 14.2%, the Bank of Italy - 12.5% ​​and the Bank of Spain - 8.3%. The shares of other central banks of the Eurozone countries range from 0.1–3.9%.

The highest body of the ECB is the Governing Council, which includes members of the executive board and the heads of central banks of the euro area member countries.

The current management of the bank's activities is entrusted to the executive board, which consists of six members, including the chairman and his deputy. Their candidacies are proposed by the governing council and must be approved by the European Parliament, as well as the heads of state of the euro area.

The main functions of the European Central Bank are:

• maintaining economic stability in the eurozone, primarily the inflation rate not exceeding 2%;
• development and implementation of monetary policy in the euro area;
• management of gold and foreign exchange reserves;
• Euro issue;
• setting interest rates.

To carry out these functions, the ECB in practice provides stabilization loans, conducts loans-for-shares auctions for leading banks, participates in foreign exchange transactions, and also makes other transactions on open markets.

The European Central Bank is formally independent in its activities. At the same time, it must report annually to the European Parliament, the European Commission, the Council of the European Union and the Council of Europe.

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Introduction

Monetary integration as an economic phenomenon appeared in the middle of the 19th century, when several monetary unions were formed at once. At the same time, this phenomenon has acquired the greatest significance in the modern world, in an era of growing globalization and tougher competition in world markets. Many countries of the world are currently striving for monetary integration, trying to realize themselves as significant players in world markets and strengthen the rates of national currencies.

In world practice, several forms of monetary integration can be distinguished, each of which has its positive and negative sides. In the process of monetary integration, the countries participating in the agreement go through several stages of development of a monetary union, which in many works appears to be the highest form of monetary integration, however, according to a number of authors, it is not a “panacea for all ills.”

The formation and development of the European Union (EU) is the integration of Western European countries in political, economic, and cultural aspects. This process continues today: the European Union is constantly expanding. And while not all EU members have adopted the euro at the moment, many of these countries are set to join the monetary union in the next decade. The main purpose of the formation of the European Union (EUI) was to create a single market for more than 370 million Europeans, ensuring freedom of movement of people, goods, services and capital. Among the goals of creating the European Monetary Union, one can highlight such as facilitating mutual settlements between participating countries, stabilizing exchange rates, as well as the emergence of a single strong and stable European currency that could compete on equal terms with the dollar on world markets.

In accordance with the Maastricht Treaty and the special Protocols attached to it, the creation of a monetary union with its own institutions began. During the integration processes (EMI) ceased to exist and gave way to new structural institutions. These became the European System of Central Banks (ESCB) and the European Central Bank (ECB). At the same time, the Protocol on the Statute of the ESCB and the ECB, annexed to the Maastricht Treaty, came into force. This Protocol defined the goals and objectives of the ESCB, the internal structure and organization, the operating procedure and control, the system of bodies of the ESCB, the status of the ECB and their jurisdiction.

The main goal of the ESCB is to maintain price stability and support the general economic policy.

1. Background and history of the creation of the European Central Bank

The completion of the Economic and Monetary Union (EMU) and the introduction of a single currency in Western Europe is one of the most significant events in the world economy at the turn of the century, which undoubtedly had a serious impact on both the European and international economies as a whole.

With the advent of the single European currency, another major currency zone is actually emerging in the world economy, which has extended its influence to many countries outside the EU. The definition of the goals and ways of creating an economic and monetary union in Western Europe was enshrined in the text of the Maastricht Treaty establishing the European Union. This historic treaty was approved by the heads of state and government of the EU at the session of the European Council on December 10-11, 1991 and signed on February 7, 1992 in Maastricht (Netherlands). The Maastricht Treaty, which entered into force on November 1, 1993, provided not only for the creation of an economic and monetary union, but also for the formation of a political union. In fact, only after the signing of this treaty did the EU countries move on to pursuing a common economic and financial policy, the ultimate goal of which was the introduction of a single currency. The agreement provided for a phased schedule for its introduction and established general rules in the field of the state budget, inflation, and interest rates for all members of the future monetary union. In the process of building the EMU, the main strategic goals were named “an independent single monetary policy aimed at maintaining price stability and the creation of a single internal market, which involves the complete removal of restrictions on the movement of capital”

In accordance with the agreements reached between the EU countries, the process of progress towards the EU monetary union fell into three phases:

Preparatory - until January 1, 1996, during which the participating countries lifted mutual restrictions on the movement of payments and capital and began to stabilize their public finances according to the criteria established by the EU as “passports” for membership in the monetary union.

Organizational - until December 31, 1998, aimed at completing the final stabilization of public finances and at forming the legal and institutional framework for a monetary union.

Implementation - by January 1, 2003, implementation of the plan to introduce the euro into non-cash and then into cash circulation of the countries participating in the agreement with the complete replacement of national currencies by a single currency.

2 . Legal aspects of the functioning of E European Monetary Institute And European Central Bank

european bank legal currency

The European Monetary Institute (EMI) was engaged in the development of legal, organizational, material and technical measures for the creation of a European Central Bank (ECB) on its basis. The EMI also coordinated the monetary policy of the Union members. The tasks of the EMI included the presentation of this structure at the time of the creation of the ESCB. Therefore, one of the main tasks of the EMI was to prepare the basis of the ESCB so that it could function from the very beginning of the third (implementation) stage.

Acting in accordance with the tasks defined in the Agreement, the EMI was engaged, in particular:

preparation of a number of instruments and procedures for the implementation of a common monetary policy in the future euro area and analysis of possible monetary policies;

further streamlining the collection, preparation and dissemination in the European area of ​​statistical information relating to finance, banking, balances of payments and other financial information;

development of a structure that ensures the conduct of exchange transactions with foreign exchange reserves of member countries participating in the European space;

increasing the efficiency of international payments and securities transactions in order to support the integration of the European market, especially in terms of the development of technical infrastructure (TARGET system). Organizing processes so that international payments go as smoothly as domestic payments;

development of euro cash, including design and technical specifications.

Also, with a view to further preparations for the organization of the European System of Central Banks (ESCB), as stated in the Agreement on the European System of Central Banks and the European Central Bank (ESCB Agreement), which is annexed to the Statute, the tasks of the EMI included:

development of harmonized rules and standards in accounting to ensure the preparation of the consolidated balance sheet at the ESCB for the receipt of internal and external reports;

identifying the necessary information and maintaining communication systems to support the activities to be carried out by the ESCB;

identification of possible ways for the ESCB to support policies pursued by the authorities to ensure the stability of credit institutions and the financial system.

The EMI also assisted in the preparation of Community and national legislation regarding the transition to the third stage. In particular, regarding currency and financial legislation, including the charters of national central banks.

In addition, the EMI cooperated with other European bodies in preparation for the transition to the third stage. In particular, either in accordance with the regulations of the Agreement or at the request of the European Council, it provided reports on:

scenarios of transition to a single currency;

coordination of foreign exchange and exchange rate policies between the European area and other Member States;

progress made by Member States towards the final implementation of their obligations to participate in the Economic and Monetary Union (harmonization of economic and legislative frameworks).

In accordance with the requirements established by law, the EMI regularly reported on its work. This was usually done in annual reports that were published in 94-97. Moreover, in January 1997, the EMI published a report setting out the specifications and structure of the ESCB for the implementation of a single monetary policy, as required by the Charter. The Statutes specified the last date by which such a report must be published as December 31, 1996. On three additional occasions, reports were published highlighting current progress in economic convergence. A number of other publications address issues of monetary policy, exchange rate policy, payments and securities markets, statistics, banknotes and the transition to the euro.

In the end, with the support of national central banks, the results of the work on developing concepts and their detailing, along with all internal documents approved by the EMI Council, were presented to the ECB.

The solid foundations laid by the EMI helped the governing bodies of the ECB in the remaining time to develop it into a strong institution for ensuring price stability in the European area, which provided the necessary conditions for maintaining economic growth.

At the same time, simply revolutionary laws were adopted. For example, national central banks were prohibited from financing the public sector, directly purchasing state debts, and the public sector’s privileged access to the resources of financial institutions was abolished.

A “non-guarantee clause” was introduced. That is, one EU member could no longer assume or assign public sector obligations in another EU country. Control over the execution of budgets in the states of the Union was tightened. National legislation was initiated to guarantee the statutory independence of the Central Bank from local governments. In May 1998, the heads of state and councils of ministers decided to issue the euro (in non-cash form for now) and the countries where its circulation would begin. In June 1998, the European Central Bank began its work in Frankfurt am Main.

3. Organizational structure European System of Central Banks and European c central bank

As previously noted, within the EU, a supranational European Central Bank (ECB) was created and the European System of Central Banks (ESCB) operating under its leadership, which includes the national central banks of the member countries of the European Union (EU). National central banks are the sole holders of ECB capital. The equity capital of the ECB at the beginning of its activities was determined in the amount of 5 billion ECU. In the future, by decision of the Board of Governors, it may increase. The country distribution of shares in the capital of the ECB is based on the share of each member country in the GDP and population of the EU.

Shares of EU central banks in the capital of the ECB

The Governing Council, which meets on Thursdays in Frankfurt, consists of members of the ECB Board and the heads of the national central banks of the member countries of the European Economic and Monetary Union (EEMU).

The Governing Council is not subordinate to either national or EU bodies. The Governing Council makes decisions on the overall monetary policy of the Eurozone by a simple majority, with each member of the Council having one vote. In the event of a tie, the Chairman of the ESCB has the casting vote.

In December 2008, the ECB will postpone the introduction of a split voting system for the Governing Council, which determines the central bank's policy, planned for January 2009, and will wait until more than 18 countries have adopted the euro as their national currency.

The ECB statement said that: “The Governing Council has decided to continue with the current voting model and introduce a rotation system only when the number of governors and presidents of national banks in the euro area exceeds 18.”

The announcement means the ECB will maintain its current one-country-one-vote system. The ECB will probably switch to a rotation system no earlier than 2012-2013.

The main motivation for introducing a rotation system is to preserve the smooth functioning of the Governing Council's decision-making process and prevent it from becoming too cumbersome as the eurozone expands.

According to the ECB's regulatory framework, the new system was supposed to come into force on January 1, 2009, when Slovakia became the 16th member of the eurozone, but a “loophole” in the charter allowed the central bank to take the opportunity to postpone the innovation until the number of eurozone members increased to 19.

When the new system becomes operational, the current one-country-one-vote system will change to a tiered voting system, with eurozone countries first divided into two groups and subsequently into three groups, with countries in each group taking turns not participating in voting.

At this point, all countries can participate in discussions, and decisions are usually made by consensus rather than formal voting.

When the number of participants reaches 22, the countries will be divided into 3 groups: the five largest countries will receive 4 votes, 11-14 countries of the second group will receive 8 votes, 6-8 countries of the third group will receive 3 votes.

This system is borrowed from the US Federal Reserve, whose Open Market Committee includes 7 members of the Fed's Governing Council, the President of the New York Fed, and 4 of the 11 heads of the Federal Reserve Bank, which are replaced every year on a rotational basis.

For the adoption of special decisions, that is, decisions regarding the participation of individual member countries in capital and reserves, the procedure for the distribution of profits, the determination of the weight of votes in the ECB Council depending on the size of the capital shares of national central banks, either a qualified majority is required (that is, at least two-thirds in relation to capital shares in the ECB, and at least half of the capital holders must be present), or a unanimous decision.

Governing body

The main responsibilities of the Board are to carry out monetary policy in accordance with decisions taken by the Board of Governors, developing directives for national central banks in accordance with the powers assigned to the Board by the Board of Governors. The Board consists of a Chairman, a Deputy Chairman and four members, who are selected by the EU Heads of State and Government on the recommendation of the respective Ministers of Economy and Finance.

Board: Jean-Claude Trichet, Gertrude Tumpel-Gugerel, Vitor Constancio, Lorenzo Bini Smaghi, Jose Manuel Gonzalez-Paramo, Jurgen Szczark.

All members of the Management Board are appointed for an 8-year non-renewable term. In order to ensure continuity and continuity of functioning, the first members of the Management Board were appointed for various terms of office - from 4 to 8 years. From January 1, the national central banks of the EMU member countries lost their independence in conducting monetary policy, and, having become part of the ESCB, became accountable to the ECB. They are intended, first of all, to ensure the functioning of the ESCB as a whole. The heads of national central banks, being members of the Board of Governors, participate in the development and adoption of decisions on monetary policy issues.

General Council

National central banks of EU countries that are not members of the EMEA are members of the ESCB with limited status and do not take part in the process of making decisions on the general monetary policy of the Eurozone and in implementing these decisions.

All national central banks of the EU countries are represented in the General Council of the ESCB (today there are 27 of them), and it also includes the Chairman and Vice-President of the ECB.

Personal composition of the General Council of the ECB:

1. Jean-Claude Trichet President of the ECB

2. Vitor Constancio Vice-chairman ECB

3. Guy Caden BelbgiAnd(Nationale Bank van België / Banque Nationale de Belgique)

4. Ivan IskrovManagerbarking BOlgarskiyfolkWowjar

5. Miroslav Singer Governor of the Central BankCzechsAnd(Ieskb nbrodnn banka)

6. Nils Bernschein Governor of the Central BankDaniAnd(Danmarks National Bank)

7. Axel A. WeberPresident, CentralbnWowBank of GermanyAnd(Deutsche Bundesbank)

8. Andres Lipstock Governor of the Central BankEmoanAnd(Eesti Pank)

9. Patrick Honahan Manager Central jar IrelandAnd (WITHcentral Bank and Financial Services Authority of Ireland

10. Georgios Provopoulos Governor of the Central BankGreactions(Bank of Greece)

11. Miguel Fernandez-Ordonez Governor of the Central Bank SpainAnd(Banco de Espaca)

12. Christian Noailles Governor of the Central BankFranceAnd(Banque de France)

13. Mario Draghi Governor of the Central BankItalyand (Bancad"Italia)

14. Athanasios Orphanidis Governor of the Central BankKipra(Central Bank of Cyprus)

15. Ilmar Rimshevich Governor of the Central BankLatviaAnd(Latvijas Banka)

16. Reynoldius SarkinasChairmanb Central BankLithuanias(Lietuvos bankas)

17. Yves Mersch Governor of the Central BankLuxembourgA(Banque centrale du Luxembourg)

18. András Šimor The presidentCentralbnWowjarWengries(Magyar Nemzeti Bank)

19. Michael C. Bonelo Governor of the Central BankSmallbTs. (Central Bank of Malta)

20. Note Welink The presidentCentralbnWowBank NetherlandsDov(De Nederlandsche Bank)

21. Evald Novotny Governor of the Central BankAustriaAnd(Oesterreichische Nationalbank)

22. Marek Belka President, CentralbnWowjar PaulbwAnd(Narodowy Bank Polski)

23. Carlos Koscha Governor of the Central BankPortugalAnd(Banco de Portugal)

24. Mugur Izarescu Governor of the Central BankRoomsneitherAnd(Banca Naуionalа Romвniei)

25. Marko Kraniec Governor of the Central BankSloveniaAnd(Banka Slovenije)

26. Josef Makuch Governor of the Central BankSlovaksAnd(Nbrodnb banka Slovenska)

27. Erki Liikanen Governor of the Central BankFinland(Suomen Pankki- Finlands Bank)

28. Stefan Ingves Governor of the Central BankSwedenAnd(Sveriges Riksbank).

The General Council has been given powers that were previously within the competence of the European Monetary Institute, including the provision of statistical reporting and the establishment of exchange rates of non-Eurozone EU countries in relation to the euro. This body will exist until all EU countries join the EMU.

The President of the European Central Bank is simultaneously the chairman of all three of its governing bodies: the Board of Governors, the Executive Directorate and the General Council; Moreover, in the first two cases, he has a casting vote in the event of an equal distribution of votes. In addition, the President represents the ECB in external organizations or appoints a proxy for this role. In relation to third parties, he, by law, represents the ECB.

The national central banks of the member countries are an integral part of the European System of Central Banks and act in accordance with the directions and instructions of the ECB.

In organizing the activities of the European Central Bank, the institution of curators is widely and successfully used, in which each of the six members of the Executive Directorate oversees a specific area of ​​activity of the European Central Bank.

The Governing Council of the ECB is empowered to develop monetary policy, and the Executive Directorate is responsible for implementing it. To the extent possible and appropriate, the European Central Bank shall make use of the capabilities of National Central Banks.

During the development and creation of the ESCB, preparatory work was carried out, in particular, by three committees and six specialized working groups, bringing together representatives of National Central Banks and the European Monetary Institute. This experience of close cooperation continues within the ESCB with necessary modifications.

Thirteen Committees operate under the leadership of the Board of Governors:

· Committee of Internal Auditors;

· Banknote Committee;

· Budget Committee;

· External Communications Committee;

· Accounting and Cash Revenue Committee;

· Legal Committee;

· Market Operations Committee;

· Monetary Policy Committee;

· International Relations Committee;

· Statistics Committee;

· Banking Supervision Committee;

· Information Systems Committee;

· Payment and Settlement Systems Committee.

The intermediaries that allow the European Central Bank to implement a common monetary policy in the countries participating in the EMU are its authorized counterparties. Credit institutions selected for this purpose must meet a number of criteria:

· in the conditions of mandatory reserves, the circle of authorized counterparties is limited only to those credit institutions that have created minimum reserves;

· otherwise, the range of possible authorized counterparties extends to all credit institutions located in the euro area. The ECB has the right, on a non-discriminatory basis, to deny access to credit institutions which, by the nature of their activities, cannot be useful in the conduct of monetary policy;

· the financial position of authorized counterparties must be checked by national authorities and found to be satisfactory (this provision does not apply to branches of organizations whose headquarters are located outside the European Economic Area);

· counterparties must meet any specific operational criteria established by National Central Banks or the ECB.

Authorized counterparties have access to the capabilities of the European System of Central Banks only through the National Central Bank of the EEAS member state in which they are located. NCBs collect applications to participate in the operations of the European Central Bank and transmit this data to the ECB's central computer in Frankfurt. Based on the collected applications, the ECB determines the market price of resources and issues appropriate instructions to the National Central Banks, which distribute transactions among counterparties. Taking into account the capabilities of modern information technologies, even relatively small organizations can participate in the operations of the ESCB. If necessary, tenders can be carried out within an hour based on electronic information exchange.

The European System of Central Banks has the right to deny access to monetary policy instruments for reasons of reliability or in the event of a gross or repeated violation of its obligations by a counterparty. When selecting participants in specialized operations, some additional criteria are applied.

4 . Goals and objectivesEuropean central banka

The main objective of the ESCB, as defined in Article 2 of the ESCB Statute, is to maintain price stability. The ESCB will, within the framework of its main task - ensuring price stability - support the economic policies of the Eurozone countries to achieve the common goals facing the European Union. The main tasks assigned to the ESCB are set out in Article 3 of the ESCB Statute. These include:

development and implementation of the EESU monetary policy;

conducting exchange transactions with foreign currencies;

management of official foreign exchange reserves of the EMU countries;

ensuring the uninterrupted functioning of settlement systems;

assistance to competent authorities in carrying out prudential control over credit institutions and ensuring the stability of the entire financial system.

The main documents define relatively clearly the currency functions and operations carried out by the ECB, provisions concerning financial reporting, audits, capital formation, capital subscription criteria, foreign operations of the bank and the distribution of foreign exchange earnings of national central banks.

The ECB can engage in the usual operations of central banks: providing loans, including against securities, to financial institutions and open market operations with various financial instruments denominated in any currency, including the currencies of countries outside the EMU, and also with precious metals. The same operations can be carried out by national central banks, guided by the general principles developed by the ECB.

The ECB's mandate includes establishing minimum reserve requirements for credit institutions of EMU member countries. We are talking about the funds that these institutions are obliged to keep in the ECB and national central banks. In cases of violation of these requirements, the ECB has the right to resort to fines and other sanctions.

The ECB's net profit is distributed as follows: an amount determined by the Governing Council and not exceeding 20% ​​of the net profit is transferred to the general reserve fund. In this case, the rule is observed that this amount cannot exceed 100% of the authorized capital. The remaining net profit is distributed among ECB shareholders in proportion to their paid-up share of capital. It should be borne in mind that the only shareholders of the ECB are national central banks. In case of losses, they are replenished either from the general reserve fund, into which the resulting profits are transferred, and, if necessary, from the foreign exchange profits of the relevant financial year in proportion and within the limits of the amounts distributed among the national central banks.

The ECB is vested with significant powers in the legal field. It is given the right to adopt regulations necessary to solve the problems facing the ESCB and the ECB. He can also make decisions and give recommendations and opinions. Regulations are normative legal acts of a general nature, which are binding in all their parts for member states and, like any other regulatory acts, have direct effect. Decisions are legal acts of an individual nature, binding on those subjects of law to whom they are addressed. Recommendations and conclusions are not binding. Giving the ECB rights and powers in the field of issuing normative legal acts inevitably gives rise, as a consequence, to the possibility of extending the control of the EU Court of Justice to these actions of the ECB. The functions performed in this case by the EU Court of Justice may concern, firstly, the interpretation of acts relating to the functioning of the ECB, and secondly, the consideration of claims that may be brought against the ECB in connection with its financial and economic activities and the exercise of administrative functions. As a general rule, disputes between the ECB, on the one hand, its creditors and debtors, or with other persons, on the other, are considered by the competent national courts.

National banks are responsible in accordance with national legislation. The decision of the ECB to initiate proceedings before the Court is taken by the Governing Council or, on its authority, by the Directorate. The Court may also hear cases of contractual and non-contractual liability based on an arbitration clause contained in a contract entered into by or on behalf of the ECB, regardless of whether that contract is governed by public law. The jurisdiction of the EU Court of Justice includes the consideration of disputes concerning the fulfillment by national central banks of obligations arising from the constituent treaties and the Charter. If the ECB considers that national central banks have failed to fulfill their obligations, it draws up a reasoned opinion, which is provided to the national central bank concerned. The latter can comment on the opinion. However, if the ECB insists on its conclusion, the national bank does not implement its recommendations within the established time frame, then the relevant dispute may be referred to the Court of Justice of the EU.

The ECB's Statute provides for significant decentralization of the activities of the European System of Central Banks, so that operations such as repos and foreign exchange interventions are independently carried out by the National Central Banks. Each of them can also independently determine which commercial bank assets are acceptable as collateral.

The European Central Bank and National Central Banks do not have the right to lend (in any form) to interstate (in the EEC system), state, regional and local authorities and organizations operating on the basis of state law. This, however, does not apply to state credit institutions, which in this case are treated in the same way as private credit institutions.

The role of the ESCB in banking supervision is quite limited. The system should only contribute to the organized conduct of relevant activities, and can offer its recommendations on the scope of applicable legislation and the manner in which it should be applied. The ESCB's charter includes provisions giving it the right to more direct participation in banking supervision, but such a transfer of powers would require a unanimous decision of the EEC Council.

The ECB advises the Council of Europe or the governments of the EEC member countries on all projects within its competence: on issues of monetary circulation, means of payment, national central banks, statistics, payment and settlement systems, stability of credit institutions, financial markets and etc.

To properly use monetary policy instruments, they must be based on reliable and comparable statistics. This entails the task of collecting statistical data. This applies in particular to financial and banking data needed, for example, to calculate the reserve requirement base, as well as price statistics, as long as they are related to the fulfillment of the aforementioned ultimate goal of the ESCB's monetary policy. In particular, partially harmonized consumer price indices have already appeared in the system.

To the extent that it does not damage the main purpose of its existence - maintaining price stability, the European System of Central Banks is called upon to support the general economic policy within the European Economic and Monetary Union.

5 . DdominationEuropeanWowcentrallyWowbankAand legal relations developing within the frameworkEuropeanOuchsystemsscentral banks

As is widely known, the main structure within which all “monetary” components of the Economic and Monetary Union operate and which determines and implements the common monetary policy of the European Community, in accordance with the Treaty establishing the European Community, is the European System of Central Banks (ESCB), which appeared in accordance with Art. 8 of the Agreement.

In accordance with Art. 107 of the Treaty, the ESCB consists of the European Central Bank (ECB) and the national central banks of the Member States. This article is supplemented by the provisions of Art. 14 (3) of the Statute of the European System of Central Banks and the European Central Bank, which states that national central banks are an integral part of the ESCB. Art. 8 of the Statute states that the basic principle of the organization of the ESCB is that its functioning is ensured by the bodies of the ECB vested with decision-making powers. In general, as noted by some scientists, “the European Central Bank is the basis of the European System of Central Banks.” The most important features of the ESCB are that the management of the ESCB is carried out by the governing bodies of the ECB, the powers of the ESCB are also exercised by the ECB, and also that, unlike the ECB and the national central banks of the member states, the ESCB is not a legal entity.

The lack of legal status of the ESCB, its own independent governing bodies and the possibility of independent exercise of powers has made it possible to put forward several points of view on the legal nature of the ESCB and the prevailing role of the ECB.

One view is that the ESCB is a system of legal entities (central banks) governed by common goals, objectives and rules. The word “System” in the European System of Central Banking should be understood “not as a designation of a legal entity, but as an expression designating the ECB and national central banks as constituent parts of an entity governed by a collection of goals, objectives and rules.” This interpretation allows us to avoid the obvious contradiction between the principles of centralization and decentralization. In such a system, on the one hand, the centralization of the decision-making process necessary for the implementation of a single monetary policy is guaranteed, and, on the other hand, the decentralization of operations that are carried out in pursuance of a single monetary policy either by the ECB or by national central banks is allowed.

The authoritative commentary on the Treaty of European Community, edited by Campbell, states that: “The European System of Central Banks is a combination of the ECB and national central banks. But only the ECB is a legal entity. The ESCB is governed by the authorities of the ECB. In other words, the ESCB is nothing more than a cape thrown over the ECB, and has no meaning other than to semantically mask the hierarchy established between the ECB and national central banks.”

Most scientists do not recognize the ESCB as having any independent and only one inherent essence or function. We can talk about the ESCB as the name of a system of certain relations that develop between the ECB and national central banks in the framework of their achievement of the goals and objectives set for the ESCB. At the same time, the dominant role in these relations belongs to the ECB, and the national central banks of the member states play a rather subordinate role in it. This suggests that "Existing national central banks become branches of the ECB with a status similar to the individual Federal Reserve Banks within the Federal Reserve System." At the same time, the subordinate role of national authorities in relation to EU bodies is generally characteristic of legal relations between EU member states and EU institutions. So Maklakov V.V. noted that “one cannot help but see that the bodies of the Member States are in a subordinate position in relation to the EU bodies.” This understanding of the ESCB gives us the opportunity both not to separate it from the ECB and national central banks, because without them the ESCB is nothing, and to emphasize what the name ESCB was created for - a unified and orderly system of relations between the ECB and the national central banks of states -members.

Art. 105 (1) of the Treaty and Article repeating it verbatim. 2 of the Statute clearly defines the purpose of the creation of the ESCB. The main one is maintaining price stability. In carrying out all its other objectives and carrying out its functions, the ESCB must first of all be concerned with the fulfillment of this task. As long as it does not conflict with its primary purpose, the ESCB must pursue its second purpose - supporting the general economic policy of the Community with a view to achieving the Community objectives set out in Art. 2 Agreements. The ESCB must implement these goals based on the principles of an open market economy with free competition, the principles set out in Art. 4 of the Treaty, as well as by encouraging the efficient allocation of resources.

To achieve these goals, the ESCB is tasked with the following tasks: determining and implementing the Community's monetary policy; conducting international exchange transactions in accordance with the provisions of Art. 111 Treaty; ownership and disposal of official foreign currency reserves of member states; promoting the proper functioning of the payment system; assistance in the implementation by competent authorities of a policy of reasonable supervision of credit institutions and the stability of the financial system.

As already emphasized above, in addition to common goals and objectives, the elements of the ESCB are also united by a rigid hierarchical structure of legal relations that develops between the national central banks of the member states and the ECB. The role of national central banks within the ESCB is clearly illustrated in Articles 9.2, 12.1, 14.3. and 34 of the Statute according to which, they are obliged to act within the framework of regulations adopted by the ECB. At the same time, the ECB regulations adopted within the system itself acquire the greatest importance. Such regulations include the main guidelines adopted by the Governing Council, instructions adopted exclusively by the Executive Committee, as well as internal decisions taken by both these bodies. Since these legal acts are binding only on the ECB and national central banks that have entered the third stage of EMU, they do not confer any rights or impose any obligations on other third parties. In turn, failure by the national central banks of the Member States that have moved to the third stage of EMU to comply with the main guidelines and instructions may lead to consideration of such failure by the EU Court of Justice. The differences between guidelines and guidelines lie not only in the bodies that issue them, but also in the issues they address. The main guidelines are legal acts intended to define and consolidate the policy of the ESCB. They contain the main framework provisions and basic rules that must be implemented by both the ECB and national central banks. An example of the main guidelines adopted by the Governing Council is the Guidelines of the European Central Bank of 1 December 1998 on the requirements for statistical reporting of the European Central Bank in the field of balance of payments and statistics of international investment positions (ECB/1998/17).

In contrast to the main guidelines, the guidelines adopted by the Executive Committee are intended to ensure the implementation of the main guidelines and decisions of the Governing Council and provide specific detailed instructions to national central banks.

Internal decisions are made by both the Governing Council and the Executive Committee in their areas of competence. They have legal force within the ESCB and deal with issues of an administrative and organizational nature. An example of such an internal decision is the European Central Bank Decision of 3 November 1998 regarding public access to the records and archives of the European Central Bank (ECB/1998/12).

Furthermore, in accordance with Art. 31. Statute, in carrying out their activities, national central banks must comply with the limit of reserve assets in foreign currency established by the ECB or seek the consent of the ECB to changes in this criterion.

Note that the dominance of the ECB and the legal relations developing within the ESCB is also reflected in the fact that in order to enter the euro area, member states had to change the legal status of their central banks in such a way as to guarantee their central banks a sufficient degree of independence provided for in the ESCB Statute and to enable them to carry out their duties under the ESCB. This has enabled some scholars to talk about “direct harmonization” of the legal status of central banks. As a result, almost all member states either adopted new laws on central banks (Belgium in March 1999, Finland in March 1998, the Netherlands in 1998) or changed their existing ones (Germany in 1997, Ireland in 1998, France in May 1998, Greece in 1998, Portugal in 1998, Spain in 1994, Sweden in 1998). In order to implement such a change in the legal status of national central banks and ensure the legality of fulfilling their obligations under EMU, a number of member states had to make appropriate changes to their constitutional documents (France, Germany, the United Kingdom (Act of European Communities with the relevant amendments and the Bank of England Act), Finland, Portugal, Sweden). In addition, even member states that have not yet decided whether to join the third stage of the Economic and Monetary Union have adopted regulations aimed at greater independence of their central banks (Bank of England Act 1997). Finally, for the successful transition to the third stage of EMU in Luxembourg, by law of December 23, 1998, a central bank was established for the first time in the history of this country.

The ECB Statute provides for ECB dominance over national central banks and in international relations. So in accordance with Art. 6.1 of the Statute, it is the ECB that decides how the ESCB will be represented in the international arena, and Art. 6.2. The Statute states that national central banks can participate in international monetary bodies only with the consent of the ECB. The ECB itself does not require such consent from anyone. National banks cannot independently go beyond the powers granted to them by the Statute. In order for them to exercise other functions, the Governing Council of the ECB must decide by two-thirds of its votes that they do not diverge from the aims and objectives of the ESCB (Article 14.4 Statute). But even such functions are performed by them on their own responsibility and are not considered part of the functions of the ESCB.

To complete the picture, we note that the ECB has the ability to force national central banks to fulfill their duties. This possibility stems from the provisions of Art. 35.6 of the Statute, which gives the ECB the right to bring such claims to the Court of Justice. At the same time, some scholars note the similarity of this ECB right to the rights of the EU Commission in relation to EU member states in accordance with Art. 226 Treaty.

I would like to repeat once again that by itself, without the ECB and the national central banks of the member states, the European System of Central Banks does not exist and cannot exist. Accordingly, the goals and objectives of the ESCB are no more than the goals and objectives of the relationship between the ECB and the national central banks of the member states. The same fact that, in accordance with Art. 8 of the Statute and art. 107 (3) of the Treaty, it is the governing bodies of the ECB - the Governing Council and the Executive Committee - that manage the entire European System of Central Banks, which means that the goals and objectives of the ESCB are implemented by the ECB and national central banks under the leadership of the ECB bodies and specifically by the ECB through its governing bodies plays a dominant role in these relationships. At the same time, the governors of national central banks, who are members of the Governing Council, represent in it, at least de jure, themselves, and not their national central banks.

Conclusion

The main institutional structure created by the European Community, which determines and implements the common monetary policy of the European Community and is responsible for issuing the euro, is the European System of Central Banks (ESCB). It consists of the European Central Bank (ECB) and the central banks of the EU member states. All central banks of EU member states are an integral part of the ESCB.

The European Central Bank is the governing body of the ESCB. Its functions are the development and implementation of a common monetary policy of the EU member states that have adopted the euro, the development of decisions and the adoption of regulations necessary for the implementation of the tasks of the ESCB, advising the institutions of the European Community and the authorities of the EU member states on issues of its competence, maintaining statistical reporting , representation of the ESCB in international organizations, issuance of euro banknotes, carrying out foreign exchange operations of the ESCB jointly with the central banks of the member states, drawing up and publishing an annual report on the activities of the ESCB and the financial report of the ESCB, performing tasks in the field of reasonable control over credit institutions, as well as ensuring the functioning Exchange rate mechanism. The ECB is an independent institution and is not subordinate to other EU bodies.

The highest organ of the ECB is the Governing Council, composed of members of the ECB Executive Committee and the governors of the central banks of member states that have adopted the euro, which makes the most important decisions, including the determination of the EU's common monetary policy. The ongoing management of the activities of the ECB is carried out by the Executive Committee, which consists of the President of the ECB, the Vice-President of the ECB and four other members. Until all EU member states have adopted the euro, the ECB has a General Council to interact with the central banks of such states, which includes members of the ECB Executive Committee, as well as the governors of all central banks of the EU member states.

The ECB is part of the European System of Central Banks, which also includes the largest and most stable central banks in Europe - the National Bank of Belgium, the Bundesbank, the Bank of Greece, the Bank of Spain, the Bank of France, and the Monetary Institute of Luxembourg.

Above we examined the composition and functions of the ECB, and also showed the role played by the ECB. Two years of experience in the work of the ESCB shows that, despite the sufficient complexity of such a system, the ESCB turned out to be quite functional. However, this period is quite short. Only the future will show to what extent the institutional features of the ESCB will allow the European Community to adapt to the changing economic situation, effectively implement the Community’s common monetary policy and at least partially harmonize the economic cycles of the member states.

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The Bank is the central bank of the European Union and Eurozone. It is known as the most independent bank in the world. It is this financial institution that has every right to independently resolve any issues related to the euro. The institution was founded in 1998. The first president of the financial institution was Wim Duisenberg, who was elected for a term of 5 years. In October 2003, Jean-Claude Trichet took over as the new president. Today the leadership position belongs to Mario Draghi.

Story

After the end of World War II, the unification of Europe began. Structuring was activated and the formation of a single market space began. In the period from 1947 to 1957, the period of integration of the states of the region was successfully completed with the parallel emergence of the European Payments Union. In 1957, the largest European states united into the European Economic Community. In 1979, fiat money - ECU - was introduced into the EEC for settlements that were immediately linked to a basket of European currencies. The memorandum on the formation of the European Monetary Area and the ECB was signed in 1988. LLC CB "Central European Bank" appeared after the signing of the international treaty on the creation of the EU in 1992 in Maachtricht, as well as after the formation of the European Monetary Institute, whose responsibilities included preparing for the transition to a single currency - the euro.

External and internal structures

The European Central Bank has a unique leadership team. It includes representatives from each EU member state. Issues related to the work of a financial institution, bills of exchange and other issues are discussed by the management of the institution and the board of governors. The directorate consists of 6 people, including the chairman of the bank and his deputy. The governing body is elected for an eight-year term. Candidates for a position in the directorate are nominated and considered by the European Parliament and the heads of states that are part of the European zone. The ECB is a member of the European System of Central Banks, which includes the national central banks of the European Union countries. The international system operates according to a two-level algorithm. Any issue regarding monetary policy can only be resolved if agreement is reached at each level.

General information

Since its creation in Germany, in Frankfurt, the Central European Bank has united under its leadership the entire system of European central banks. The structure includes:

• Bank of Belgium.
• Bundensbank.
• Bank of Greece.
• Bank of Spain.
• Bank of France.
• Monetary Institute of Luxembourg.

Only the ECB has the status of a legal entity; all other financial institutions included in the system play the role of auxiliary units. Their tasks are secondary. The main goal of the ECB is to prevent sharp increases in prices and stabilize the inflation rate, which should not exceed 2%. Any decisions and actions of the bank have a direct impact on the exchange rate of the European currency against other currencies of the world. Sharp fluctuations are caused by changes in interest rates and the provision of credit to member states of the union.

What does the ECB do?

The Central European Bank simultaneously performs several dominant functions:

• Development and implementation of monetary policy in the territory
• Providing, developing and managing exchange reserves of countries from the euro area of ​​an official nature.
• Euro issue.
• Setting interest rates.
• Ensuring price stability in the European zone.

The ECB's indicators are the price index for goods for consumers throughout the EU and the growth rate of which during the year should not be more than 4.5%.

Basic bank interest rates

The functions of the European Central Bank include determining and setting interest rates. Interest rates can be of three types:

• Refinancing rate. This is the interest rate that determines the minimum value for applications to raise funds in a tender held by the ECB.
• This is the interest rate that is the base rate when placing free funds in ECB institutions. The rate acts as a lower bound in the overnight interest rate market.
• Limit rate on loans- this is the rate at which you can get a loan from banks of the ESB structure, which is necessary to maintain short-term liquidity. The cap acts as the cap on the range within the overnight interest rate market.

By setting these types of rates, the European Central Bank creates the demand or supply of the currency, ensures its stability and controls cash flows within the zone.

General provisions

The European Central Bank is a unique legal entity whose work is based on international agreements. The authorized capital of the institution at the time of its creation was equal to 5 billion euros. The largest banks in Europe acted as shareholders. The German Bundesbank contributed 18.9% of the capital, the Bank of France - 14.2%, the Bank of Italy - 12.5%, the Bank of Spain - 8.3%. The remaining central banks of European states contributed from 0.1% to 3.9% of the initial authorized capital. The activities of the financial institution are managed by the executive council, which was mentioned above, headed by the Chairman of the European Central Bank. The main feature of a financial organization is complete independence. At the same time, the institute is obliged to submit a report on its activities every year to the European Parliament, the European Commission, the Council of the European Union and

Activity Policy

To achieve its objectives, the ECB uses instruments such as stabilization loans and collateral auctions, foreign exchange transactions and open market transactions. The most powerful instrument for regulating the financial market is the rate of the European Central Bank. The work of the monetary institution is based on the principles of independence from other states, as well as from supranational regulatory bodies. The work of the latter, first of all, provides for the absence of coercion when covering external and internal debt. To make a decision on each specific resolution, a majority of members of the management council must vote for it. Each of them has only one opportunity to vote. The head of the European Central Bank must follow the advice of the council. Only after a certain decision has been made can the central banks of European countries be actively involved in its implementation.

Powers of the ECB and national central banks

The ECB, in joint efforts with the central banks of the member states of the association, has the right to form relations with the central banks of other states, and, if necessary, with international organizations. Opportunities are open for the acquisition, sale and forward of any type of assets, including banking metals. The concept of “currency assets” includes securities in any currency and in any units of account. Ownership and management of assets is allowed. The ECB conducts a wide range of banking organizations of any type, in which international organizations and representatives of third parties may act as partners. Partnership relationships may include borrowing and credit operations. In addition to the main functions mentioned above, the European Bank, in cooperation with the Central Banks of European countries, can carry out operations with administrative purposes, as well as act in the interests of board members. An important stage in the development of the bank’s activities can be called the formation of the European Monetary System, which began to exist in 1979.

European Monetary System within the ECB

The European Central Bank refinancing rate is not the only thing that affects the European Monetary System. EMU itself has a number of specific tasks. We can talk about the following areas:

• Ensuring currency stability within the EU.
• Maximum simplification of convergence processes with active economic development.
• In conditions of stability, the currency system provides a growth strategy.
• Stable systematization of monetary and economic relations of an international nature.

It was thanks to the introduction of such a monetary unit as the ECU into circulation that the states of the European Union successfully coped with the crisis of the 80s. After the victory over the inflation process, restrictions on current financial transactions were lifted. Since 1990, the free flow of capital regime has been activated. Initially, the EU's goal was to ensure optimal conditions for the movement of goods and services, capital and labor. The ECB was created to stimulate the introduction of a common currency and common citizenship. His work, even at the planning stage, was supposed to help form organizational and legal mechanisms for coordinating not only the foreign policy, but also the security policy of each participating state.

Verified brokers:

The European Central Bank is the official regulator of credit and financial policy, exercising the powers of the Central Bank in the territory of the EU countries and managing the foreign exchange reserves of the commonwealth of countries. The city where the headquarters of the European regulator is located is Frankfurt am Main (Germany).

Attempts by European countries to unify the political and financial systems were observed much earlier than the creation of the EU. The first steps to introduce a single currency were taken back in 1957, when France, Germany and Italy, as well as the Benelux states, signed an agreement to create an economic commonwealth. In 1962, members of this commonwealth at the official level put forward the idea of ​​​​the need to issue a monetary unit that would circulate on the territory of the EEC countries. However, as a result of many disagreements, this issue was not resolved for a very long time. The main opponents in this issue were Germany and France. As a result, to resolve all disagreements, a committee was created, headed by Werner P., which developed a step-by-step plan for organizing a monetary union until the end of 1980.

However, this plan was never implemented. It collapsed in 1971, after which the world economy began to be rebuilt to a new template. An additional factor that prevented the implementation of the “Werner plan” was the absence at that time of a common European market where capital would have free circulation.

All of the above factors only spurred European countries to unify their eurozone financial systems. In 1979, as a result of agreements between Germany and France, the European Monetary System was organized, and the first common currency, the ecu (predecessor of the euro), appeared in circulation. True, at that time it was used only for internal non-cash payments, which significantly distinguishes it from the current eurozone currency (euro).

From that moment on, it took a whole decade for European financiers to approach the next stage - the creation of a single political and economic community of Europe with a full-fledged common currency. This happened in 1992 in Maastricht (Holland), where representatives of the future members of the single zone signed an agreement establishing the EU, which united the political systems of the participating countries, their international relations and internal affairs. To join the EU, a state had to meet the following criteria:

• Budget deficit – up to 3% of GDP
• Public debt – no higher than 60% of GDP
• Inflation – no higher than 1.5%
• Availability of a currency regulation system
• The interest rate of the country's Central Bank can exceed the rates of other EU countries by no more than 2%.

At the same time, the regulation of the monetary euro system was entrusted to the European system of central banks, and the creation of a single regulator was planned for 1999, when the EU was supposed to receive a single currency (“euro”). Fulfilling the provisions of the agreement of the participating countries, by mid-1998 the European Central Bank was organized. Wim Duisenberg, a Dutchman by nationality, became its president (today the President is M. Draghi), and a currency was introduced - the euro (€).

Structure

The European Central Bank consists of the following main bodies:

• The Board of Governors is the highest governing body (its decision determines the refinancing rate).
• Executive Council – currently headed by M. Draghi
• General Council – carrying out advisory functions for all bodies of the board

Board of Governors

The main task: managing the reserves of the national banks of the Commonwealth and determining the EU monetary policy (including the refinancing rate). The Council consists of 25 people, 6 of whom are members of the ECB Executive Committee. The rest are heads of central banks from the EU.

Regular meetings of the Council (scheduled meetings of the ECB) are held twice a month, at which you can see the speech of the head of the ECB and other members of the Council. Decisions at meetings are made by a majority of members (including the key rate) through voting (legitimacy - at least 2/3 of the total number of members). In case of equality of votes, the opinion of the President of the European Central Bank (M. Draghi) is decisive.

Executive Council

another important body of the Central Bank (headed by M. Draghi), which is entrusted with the functions of implementing all decisions of the Council. It consists of 6 people appointed to positions from among employees of the banking system of EU countries by the heads of EU governments. The main function of the executive board is to implement the decisions of the Governing Council, as well as to manage the overall process of the activities of the European Central Bank.

The head of the executive board is the President of the European Central Bank (currently M. Draghi), who is appointed by the Governing Council in agreement with the European Parliament. The current members of the executive board include:

• (Italy) – President

Board members:

• V. Constancio (Portugal)
• B. Quéré (France)
• P. Praet (Belgium)
• S. Lautenschläger (Germany)
• I. Mersch (Luxembourg)

General Council

The advisory body of the European Central Bank, which is headed by the President (M. Draghi) and the Vice-President of the ECB, also consists of 28 chairmen of the national banks of the EU countries.

The General Council includes 19 representatives of euro area countries.

The powers of the General Council include:

• Consultation between the Executive Board and the Governing Council of the ECB
• Preparation of reports
• Development of new rules and regulations for the EU financial system
• Development of instructions for ECB officials

Functions

In carrying out the tasks assigned under the Statute, the functions of the ECB are as follows:

• Issue – euro
• Determination of discount rates in the euro area (prime rate, deposit rate, lending rate).
• Banking supervision (with advisory rights)
• Consulting in the euro area
• Analysis of statistics in the euro area and other important indicators of the functioning of the financial system

At the same time, using numerous levers of monetary regulation, the ECB carries out the following tasks:

Main operations (within the framework of the main refinancing) – provision of borrowed funds in euros for a period of up to 14 days at a predetermined rate.

Long-term operations (within the framework of long-term refinancing) – provision of credit funds in euros for a period of up to 3 months at a predetermined rate.

Financial fine-tuning operations are closed financial transactions carried out in bank secrecy, which include:

• High-speed deposit tenders and credit auctions
• Definitive transactions
• Providing discount loans
• Currency swaps

Also, the main tasks of the regulator include the withdrawal and provision of excess liquidity of paper and electronic euros (credit and deposit transactions), which give banks and other institutions the opportunity to manage funds at the end of the working day and after the end of the working day.

Tasks

The main tasks of the regulator include maintaining a single monetary policy while simultaneously ensuring price stability in the eurozone economies, which is carried out through various levers of monetary regulation (one of which is the regulator’s key rate).

One of the primary tasks of the European Central Bank is to curb inflation, which, according to current standards, should not rise above 2%. However, recently, due to gradual changes in the global financial system, recession and deflation depressing economic growth, the inflation pressure level has been raised to 3.5%.

Independence

Finally, it is worth mentioning the independence of the European Central Bank. Of course, to some extent, the European Central Bank is dependent on Euro-politics and the world political system. However, in legal terms, the ECB is an autonomous and independent body from other authorities that exercises its powers without any interference in its work from members of the governments of the euro area and other countries of the world.

In general, the independence of officials of the European Central Bank is ensured by the following standards:

The President of the ECB (M. Draghi - to date) is appointed to his position every 5 years.

The minimum period for fulfilling official duties as a member of the board of the ECB Executive Committee is 8 years;

Early removal from a position as part of the regulator can be carried out due to physical inability to continue to perform their official duties or when serious errors are made in their work.

Disagreements that arise in connection with the work of the European Central Bank itself are always resolved through the European Court of Justice.

The ECB is a joint stock company whose shares are distributed among the national banks of the member states of the European Community. The profits resulting from the work of the ECB are always distributed as follows:

• 20% of the profit (by decision of the Governing Council) is deposited in the ECB reserve fund.
• account balances are distributed among shareholders as dividends, according to the size of their share contribution.

Principles of monetary regulation

Based on the fact that the European Central Bank is a single body created to ensure a unified stable system of monetary relations of all EU states, the regulator carries out its functions based on the following principles:

• Equality for all eurozone members
• Striving to achieve an optimal balance between cost and efficiency
• Compliance of ECB standards with decisions of national central banks of euro area countries
• Decentralization

The ESCB (European System of Central Banks) manages the foreign exchange reserves of all eurozone members. And the ECB itself, on a credit basis, manages the gold and foreign exchange reserves of the European Community states, the size of which is determined according to certain standards. The largest contributions to the ECB come from countries such as:

• Germany – 18.8%
• France – 14.3%
• Italy – 12.4%
• Spain – 8.2%

The size of the shares of other banks ranges from 0.2 – 3.8%

EU Single Payment System

Immediately after the creation of the euro area, EU countries needed a system that would allow them to unite the euro area into an area of ​​free and efficient electronic payments. Such a system was TARGET, which initially included 16 of the largest payment systems in Europe. To date, TARGET already includes 25 payment systems, and its daily turnover is about 3 trillion euros.

Organizational structure and functions of the ESCB divisions

The European System of Central Banks (ESCB) is an international banking system consisting of the supranational European Central Bank (ECB) and the National Central Banks (NCBs) of the member states of the European Economic Community. The existence of this system is an integral part of the process of establishing the European Economic and Monetary Union.

The structure of the ESCB is somewhat similar to the Federal Reserve System in the United States. At the same time, the national central banks of Great Britain, Denmark, Greece and Sweden are members of the European System of Central Banks with a special status: they are not allowed to take part in decisions regarding the implementation of a common monetary policy for the euro area and implement such decisions. The European system of central banks includes the European Central Bank and the National Central Banks of the countries participating in the euro area. The statutes of the ESCB and the ECB proclaim the independence of these organizations from other bodies of the Union, from the governments of the member countries of the EMU and any other institutions. This is quite consistent with the normal status of a central bank within a single country. At the same time, the “general principle” enshrined in a special article of the charter is of significant importance, according to which the European System of Central Banks is governed by the leadership (“decision-making bodies”) of the European Central Bank, and, above all, by the Governing Council.

The Governing Council, the supreme governing body, includes all members of the Executive Directorate and managers of the national securities of the member countries of the European Economic and Monetary Union only.

The main functions of the Board of Governors include:

adapting instructions and making decisions to ensure the achievement of the objectives of the creation of the European System of Central Banks;

determination of key elements of the UMES monetary policy, such as interest rates, the size of the minimum reserves of National Central Banks, and the development of specific instructions for its implementation.

Goals and principles of organizing the activities of the ESCB

The main purpose of the creation of the European System of Central Banks, in accordance with Article 2 of the Statute of the ESCB and the ECB, is to maintain price stability.

In October 1998, the Governing Council of the ECB clarified the main goal of the EMEA monetary policy, indicating that the concept of “price stability” provides for the possibility of growth of the harmonized price index for consumer goods by up to 2% per year, while simultaneously defining its structure in relation to consumer goods and services .

It has been established that price stability must be maintained in the medium term, and price increases above the established value and deflation, i.e., a long-term decrease in their level, reflected by the harmonized price index for consumer goods, are unacceptable. The establishment of price stability within the framework of the EEAS corresponds to the principles that guided the National Central Banks of most countries before their unification into the Union, which ensures continuity in the conduct of monetary policy. In the course of its activities, the European system of central banks also performs the following functions:

issue of banknotes and coins. The ECB is the only organization that has the power to authorize the issue of banknotes denominated in euros. The ESCB will issue these banknotes, which will become the only legal tender in the EMEA countries.

cooperation in the field of banking supervision. The role of the ESCB in banking supervision is quite limited. The system should only contribute to the organized conduct of relevant activities, and can offer its recommendations on the scope of applicable legislation and the manner in which it should be applied. The ESCB's charter includes provisions giving it the right to more direct participation in banking supervision, but such a transfer of powers would require a unanimous decision of the EEC Council.

advisory functions. The ECB advises the Council of Europe or the governments of the EEC member countries on all projects within its competence: on issues of monetary circulation, means of payment, national central banks, statistics, payment and settlement systems, stability of credit institutions, financial markets and etc.

collection of statistical data. To properly use monetary policy instruments, they must be based on reliable and comparable statistics.

The activities of the ECB include:

providing loans, including pawn loans, to financial institutions;

open market operations with various financial instruments;

establishing minimum reserve requirements for credit institutions of the EEMS member countries.