Organisation

The Eurosystem

Members

The legal texts which established the European System of Central Banks (ESCB) - the Maastricht Treaty and the Statute of the ESCB of 1993- were written on the assumption that all EU Member States will adopt the euro and that therefore the ESCB will conduct all the tasks involved in the single currency. However, until all EU countries have introduced the euro, it is the "Eurosystem" which is the key actor. The term "Eurosystem" covers the ECB and the national central banks of those EU Member States that have adopted the euro. Until now an unofficial term, it is mentioned for the first time in the Lisbon Treaty (Article 282 of the Treaty on the Functioning of the European Union).

The Eurosystem as the central banking system of the euro area comprises:

• the ECB, and
• the national central banks (NCBs) of the 16 EU Member States whose common currency is the euro.

The Eurosystem is thus a sub-set of the ESCB. Since the ECB's policy decisions, such as on monetary policy, naturally apply only to the euro area countries, it is in reality the Eurosystem which as a team carries out the central bank functions for the euro area. In doing so, the ECB and the NCBs jointly contribute to attaining the common goals of the Eurosystem.

Why a system instead of a single central bank?

There are three main reasons for having a system of central banking in Europe:

• The Eurosystem approach builds on the existing competencies of the NCBs, their institutional set-up, infrastructure, expertise and excellent operational capabilities. Moreover, several central banks perform additional tasks beside those of the Eurosystem.
• Given the geographically large euro area and the long-established relationships between the national banking communities and their NCB, it was deemed appropriate to give the credit institutions an access point to central banking in each participating Member State.
• Given the multitude of nations, languages and cultures in the euro area, the NCBs (instead of a supranational one) were best located to serve as access points of the Eurosystem.

For the mission statement of the Eurosystem, see www.ecb.europa.eu/ecb/orga/escb/html/mission_eurosys.en.html