DEFINITION of 'European Central Bank - ECB'

The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed in Germany in June 1998 and works with the other national banks of each of the EU members to formulate monetary policy that helps maintain price stability in the European Union.

BREAKING DOWN 'European Central Bank - ECB'

The European Central Bank has been responsible for the monetary policy of the European Union since January 1, 1999, when the euro currency was adopted by the EU members. The responsibilities of the ECB are to formulate monetary policy, conduct foreign exchange, hold currency reserves and authorize the issuance of bank notes, among many other things.

RELATED TERMS
  1. European Monetary System - EMS

    A 1979 arrangement between several European countries which links ...
  2. Central Bank

    The entity responsible for overseeing the monetary system for ...
  3. Euro Notes

    Legal tender in the form of a banknote that can be used in exchange ...
  4. European Economic and Monetary ...

    The successor to the European Monetary System (EMS), the combination ...
  5. National Bank

    In the United States, a commercial bank chartered by the comptroller ...
  6. Reserve Assets

    Currency, commodities or other financial capital held by monetary ...
Related Articles
  1. Personal Finance

    What Does a Central Bank Do?

    A central bank oversees a nation’s monetary system.
  2. Investing

    Get To Know The Major Central Banks

    The policies of these banks affect the currency market like nothing else. See what makes them tick.
  3. Investing

    The European Central Bank’s Bond Buying Program

    Assisting countries like Greece and Portugal through bond purchase may be a good idea in the short term, but what happens to the ECB in the long term?
  4. Insights

    What Are Central Banks?

    They print money, they control inflation, and much, much more. All you need to know about central banks is here.
  5. Personal Finance

    World's Central Banks Prepare for Brexit Fallout

    Central banks from Europe to the US and abroad pledged to step in to stabilize markets with emergency liquidity measures to prevent all-out disaster.
  6. Trading

    A Primer On Currency Regimes

    Currency regimes are dynamic and complex, reflecting the ever-changing landscape of their respective nations' monetary and fiscal policies.
  7. Trading

    Quantitative Easing

    Learn more about this monetary policy employed by central banks.
  8. Investing

    What is the European Union?

    The European Union is a group of European countries that participate as one unit in the global economy, and who mostly operate under one currency.
  9. Trading

    Top 8 Most Tradable Currencies

    Currencies can provide diversification for a portfolio that's in a rut. Find out which ones you need to know.
  10. Insights

    What Do the Federal Reserve Banks Do?

    These 12 regional banks are involved with four general tasks: formulate monetary policy, supervise financial institutions, facilitate government policy and provide payment services.
RELATED FAQS
  1. When and why did the euro make its debut as a currency?

    On January 1, 1999, the European Union introduced its new currency, the euro. Originally, the euro was an overarching currency ... Read Answer >>
  2. How do central banks acquire currency reserves and how much are they required to ...

    A currency reserve is a currency that is held in large amounts by governments and other institutions as part of their foreign ... Read Answer >>
  3. What precise measures are implemented in most monetary policies?

    Read about some of the precise measures implemented in most monetary policies, and learn why monetary policy is considered ... Read Answer >>
  4. How do open market operations affect the U.S. money supply?

    Formulating a country's monetary policy is extremely important when it comes to promoting sustainable economic growth. More ... Read Answer >>
  5. Why doesn't England use the euro?

    Understand why the United Kingdom has opted to not join the eurozone in adopting the euro over the pound sterling as its ... Read Answer >>
Hot Definitions
  1. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations ...
  2. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
  3. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate ...
  4. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding shares. The majority shareholder is often the founder ...
  5. Competitive Advantage

    An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities ...
Trading Center