Organisation

Decision-making bodies of the ECB

Fulfilling the ECB’s mission

The ECB’s mission is to keep inflation low and stable. To achieve this goal, it closely follows economic developments in the euro area and seeks to influence the state of the economy through its decision-making. The ECB has three bodies which take all the decisions in this respect:

• the Governing Council, 
• the Executive Board, and
• the General Council.

The General Council will exist only as long as there are EU Member States which have not yet adopted the euro as their currency. Both the decision-making procedures and the various tasks are specified in the Statute of the European System of Central Banks (ESCB Statute).

Centralised decision-making

The ECB is the centre of decision-making in the Eurosystem. Thus, the Governing Council, the Executive Board and the General Council of the ECB each take all the decisions necessary to enable the Eurosystem and the ESCB to carry out their respective tasks. This includes the formulation of policies, such as the monetary policy for the euro area, but also how they should be implemented.

Principle of decentralisation

The ESCB Statute does not specify who should implement the ECB's policies and decisions: the ECB itself or the national central banks. Article 12.1 states merely that the ECB should have recourse to the national central banks (NCBs), where possible and appropriate, to carry out operations. 

This principle of decentralisation should not be confused with the "principle of subsidiarity", as set out in Article 5 of the Treaty on European Union. Subsidiarity means that the need for centralisation must be proven conclusively before action at Union level can be taken. In Stage Three of Economic and Monetary Union, however, monetary policy is conducted exclusively at Union level - under the authority of the ECB's Governing Council. Therefore it is centralised by definition and does not need to be justified. Instead, it is for the ECB to evaluate the extent to which decentralised implementation is possible and appropriate.

Decentralised operations

For the bulk of the Eurosystem's activities, there is indeed a division of labour guided by the principle of decentralisation.

The NCBs perform almost all operational tasks of the Eurosystem. In particular, they carry out the monetary policy operations and, as agents of the ECB, most foreign exchange operations, provide payment and securities settlement facilities, and ensure the procurement, issue and post-issue handling of euro banknotes. They also collect statistics for the ECB, collaborate with the ECB on translation and the production of publications and contribute to economic analysis and research. 

By contrast, the ECB carries out few operations while it oversees all of them, in order to ensure that the operations of the Eurosystem are performed consistently by the euro area NCBs. 

For the ESCB Statute online, see www.ecb.europa.eu/ecb/legal/1341/1343