The European Central Bank

09/04/2014 | Lidia Gómez Martínez (Alumna UC)

The European Central Bank is the European Union´s central bank. It drives monetary policy of Eurozone states. It was created in 1998 and its headquarters are in Frankfurt, Germany.

The European Central Bank´s president is Mario Draghi and has the highest position in the Governing Council. Its members include: 6 people on the Executive Board and the 17 Eurozone central banks´ governors.

The main objective of the ECB is to maintain price stability. Its basic tasks are to define monetary policy, to make foreign exchange operations and to manage euro reserves. Other functions are to issue banknotes, to foster national and international cooperation, to make statistics, etc.

Recently, the ECB has come under severe scrutiny because of its policies to stave off another crisis. Measures like giving money to banks have been much criticized. Another measure adopted by the ECB has been to decrease interest rates. In a meeting held recently, the ECB stipulated that interest rates would stay at 0.25%, which represents a historical minimum. Mario Draghi said these low interest rates would help exporting enterprises and enterprises that need financing. They also are trying to ensure market liquidity. But this also could have negative implications because it could cause deflation. So there are people who think the ECB´s decisions are not a good idea.

The general idea is that the ECB is doing a good job with the tools it has at hand. Oscar Moreno, analyst from Renta 4 says the ECB is doing everything necessary in order for Europe to get over the crisis. It will be interesting to see if the ECB decides to implement quantitative easing policies in the future, to see specifically how they are carried out and how long they are left in place.

Nota: Este artículo ha sido elaborado por Lidia Gómez Martínez, alumna de la Universidad de Cantabria, como una de las actividades enmarcadas dentro del programa de capacitación lingüística, dando su permiso para la publicación del mismo en FxM Noticias/OIE24 News.

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