European Central Bank

The ECB was established in 1998, shortly before the euro was introduced in 1999, and is based in Frankfurt, Germany. Together with the national central banks of euro area countries, it forms the Eurosystem.

The ECB’s primary objective is price stability, which it defines as inflation of 2% over the medium term. It sets key interest rates, including the deposit facility rate, and uses other tools, such as asset purchases and lending to banks.

Monetary policy decisions are made by the Governing Council, made up of the six members of the Executive Board, including the President, and the governors of the national central banks of euro area countries.

Since 2014, the ECB has also directly supervised the largest banks in the euro area through the Single Supervisory Mechanism, while national authorities supervise smaller banks under its oversight.

For example, after inflation rose sharply in 2022, the ECB raised interest rates for the first time in more than a decade. During the euro area debt crisis, its president’s 2012 pledge to do whatever it takes to preserve the euro helped calm markets. The ECB is independent of national governments and EU institutions.