what is european central bank ecb 
the european central bank ecb is the central bank responsible for monetary policy of the european union eu member countries that have adopted the euro currency this currency union is known as the eurozone and currently includes 19 countries the ecb s primary objective is price stability in the euro area understanding european central bank ecb the european central bank ecb is headquartered in frankfurt am main germany it has been responsible for monetary policy in the euro area since 1999 when the euro currency was first adopted by some eu members the ecb governing council makes decisions on eurozone monetary policy including its objectives key interest rates and the supply of reserves in the eurosystem comprising the ecb and national central banks of the eurozone countries it also sets the general framework for the ecb s role in banking supervision 1the council consists of six executive board members and a rotation of 15 national central bank governors instead of an annual rotation of voting rights as for regional federal reserve bank presidents the ecb rotates voting rights monthly central bank governors from the top five countries by the size of their economies and banking systems as of may 2022 germany france italy spain and the netherlands share four voting rights while the central banks of the other countries vote only slightly less frequently at 11 months out of every 14 2the ecb s mandate is for price stability and it targets an annual inflation rate of 2 over the medium term like the federal reserve s inflation targeting it is symmetrical so that inflation too low relative to its target is viewed as negatively as inflation above it 3the 2 target provides a buffer against the risk of a destabilizing deflation during a recession 4european central bank ecb functionsthe primary responsibility of the ecb linked to its mandate of price stability is formulating monetary policy monetary policy decision meetings are held every six weeks and the ecb is transparent about the reasoning behind the resulting policy announcements it holds a press conference after each monetary policy meeting and later publishes the meeting minutes the eurosystem comprises the ecb and the central banks of eurozone countries the eurosystem manages the euro currency and supports the ecb s monetary policy the parallel european system of central banks includes all central banks of eu states including those that have not adopted he euro 5the ecb is also the eu body responsible for banking supervision in conjunction with national central bank supervisors it operates what is called the single supervisory mechanism ssm to ensure the soundness of the european banking system 6 the ssm enforces the consistency of banking supervision practices for member countries lax supervision in some member countries contributed to the european financial crisis the ssm was launched in 2014 all euro area countries are in the ssm and non euro eu countries can choose to join 