Preview

Ecb Monetary Policy

Powerful Essays
Open Document
Open Document
1523 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Ecb Monetary Policy
Monetary Policy
The European Central Bank

Organization
European System of Central Banks
European Central Bank (ECB)

Malta Greece Spain Ireland Bulgaria Sweden Denmark

Slovenia France Slovakia Austria Latvia Poland Romania

Finland Estonia Germany

Cyprus

Netherlands Hungary Lithuania

United Kingdom Czech Republic

Eurosystem
Page 2

Belgium

Italy

Portugal

Luxembourg

Decision-Making
THE DECISION-MAKING BODIES OF THE ECB
EXECUTIVE BOARD
President Vice-President Four other members

GOVERNING COUNCIL
Executive Board Governors of the EURO area NCBs

GENERAL COUNCIL
President Vice-President Governors of the EU Member NCBs

 Prepares meetings of the Governing Council  Implements monetary policy  Manages day-to-day business  Exercises certain powers

 Formulates monetary policy  Adopts guidelines and makes decisions to ensure the performance of the Eurosystem ESCB Commitees

 Has no responsibility for monetary policy  Tasks of former EMI  Reports about progress towards convergence  Advises preparation for adopting Euro

Page 3

Mandate of the Eurosystem - Two-Pillar Approach
The primary objective is to maintain price stability.
Without prejudice to this objective, the Eurosystem shall support the general economic policies of the European Community.

Makes the monetary policy decisions based on an overall assessment of the risks to price stability

Governing Council

ECONOMIC ANALYSIS on the economic dynamics and shocks

cross-checking

MONETARY ANALYSIS on monetary trends

Full set of information
Page 4

Comparison: FED and the Eurosystem
Topic decision-making Eurosystem Governing Council FED FOMC

€: all NCBs are allowed to vote equally $: 5 out of 12 reserve banks are allowed to vote  Executive Board has less power than the Board of Governors objectives Price stability Multiple objectives

 FED is more flexible than the Eurosystem Implementation Decentralized Centralized


References:  Daniela Garbor; “The ECB and the Eurozone debt crisis” available at http://www.academia.edu/868218/The_ECB_and_the_European_Debt_Crisis  Daniel L. Thornton; “The Federal Reserve’s Response to the Financial Crisis: What It Did and What It Should Have Done“; Working Paper 2012-050A; October 2012; available at http://research.stlouisfed.org/wp/2012/2012-050.pdf  Christopher J. Neely; “The European Debt Crisis and Its Implications for the United States”; The University of Missouri–St. Louis, St. Louis, MO; September 13, 2012 Page 20
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Satisfactory Essays

    ECO 372 Week 3 Knowledge Check
    • 276 Words
    • 2 Pages

    ECO 372 Week 3 Knowledge Check

    3. Which of the following do policy makers tend to target when setting monetary policy?…

    • 276 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Global Financing and Exchange Rate Mechanisms Paper
    • 1454 Words
    • 6 Pages

    Global Financing and Exchange Rate Mechanisms Paper

    Obringer, L. A. (n.d.). How the euro works. Retrieved October 2, 2006, from Web site…

    • 1454 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Good Essays

    Eastern Europe Financial Crisis
    • 885 Words
    • 3 Pages

    Eastern Europe Financial Crisis

    Roche, D 2009, ‘Eastern Europe and the financial crisis’, The Wall Street Journal, 28 March 2009, viewed 09 May 2015, < http://www.wsj.com/articles/SB123819932316462089>.…

    • 885 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    Federal Reserve System Research Paper
    • 4310 Words
    • 18 Pages

    Federal Reserve System Research Paper

    The Federal Reserve Board of Governors Federal Reserve Functions The Money Supply Inflation Cause Effect Controlling Conclusion…

    • 4310 Words
    • 18 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Regional Integration Ireland and the European Union
    • 1165 Words
    • 5 Pages

    Regional Integration Ireland and the European Union

    This Massive collective of countries offers the coming together of many different cultures, with complex, and advanced ideas from all walks of the European life giving many facets to the abundance of opportunity for integration to truly work. The European Central Bank is the responsible party of the monitory portions of the E.U. and though there is no common representation, Governance is handled by the currency Union. (Hill 2007)…

    • 1165 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Good Essays

    Role of the European Central Bank in Resolving the Current Economic Crisis Sweeping through Europe
    • 918 Words
    • 3 Pages

    Role of the European Central Bank in Resolving the Current Economic Crisis Sweeping through Europe

    The European Central Bank (ECB) based in Germany, was established in 1998; it is the central bank for Europe’s single currency that is the euro (Ecb.europa.eu 2015). It consists of 19 European member states out of 28 European union countries, where they all adopt the euro currency, which is also known as the Eurozone (Howarth & Loedel 2003).Only two European Union states are not in the Eurozone, Denmark and United Kingdom. The role of the European central bank is to implement and framing the EU’s monetary policy and economic policy (Allsopp & Vines 1999). The European Central Bank (ECB) is one of the most important factors in the financial crisis and the sovereign debt crisis in the Euro- Zone. The ECB has an important role to play to resolve these issues during this crisis.…

    • 918 Words
    • 3 Pages
    Good Essays
    Read More
  • Good Essays

    MONETARY VS FISCAL POLICY
    • 638 Words
    • 2 Pages

    MONETARY VS FISCAL POLICY

    In looking at the structure of Monetary and Fiscal policies, it must be understood how the two relate to each other within the government structure. The Federal Open Market Committee - FOMC - is the most important monetary policy-making body of the Federal Reserve System. It is responsible for the formulation of a policy designed to promote economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments. The seven Board members constitute a majority of the 12-member Federal Open Market Committee, the group that makes the key decisions affecting the cost and availability of money and credit in the economy whose decision-making increased the inflation rate by 1.5%. The other five members of the FOMC are Reserve Bank presidents, one of who is the president of the Federal Reserve Bank of New York. The Board sets reserve requirements and shares the responsibility with the Reserve Banks for discount rate policy. The FOMC is the policy arm of the Fed and the tasks of the Federal Reserve are to supervise banks, fixing maximum rates of interests.…

    • 638 Words
    • 2 Pages
    Good Essays
    Read More
  • Good Essays

    Arguments for and Against Joining the Euro
    • 1198 Words
    • 5 Pages

    Arguments for and Against Joining the Euro

    |Enable businesses to more clearly understand their profit and |The UK would be required to bailout other Euro countries in order |…

    • 1198 Words
    • 5 Pages
    Good Essays
    Read More
  • Best Essays

    Eurocrisis
    • 3363 Words
    • 14 Pages

    Eurocrisis

    The obvious answer is that yes, the euro-crisis has had an impact on the European integration process, making it more difficult for new countries to access to the EU.…

    • 3363 Words
    • 14 Pages
    Best Essays
    Read More
  • Powerful Essays

    Minsky model
    • 3797 Words
    • 16 Pages

    Minsky model

    Since the end of the Great Depression “…financial failure has been more extensive and pervasive” in the 30-year period 1980 to 2010 than at any other time leading up to the present day (p. 7). Four financial crises occurred in this 30-year period. The closest in time of the four financial crises to the present period is the recent liquidity crisis, the so-called Great Recession of 2007 – 2009, beginning in the United States, Great Britain, Spain, Ireland and Iceland. Eventually all of the countries of the Eurozone succumbed to the disequilibria of the Great Recession with the Eurozone’s suffering further intensifying because of the emergence of the so-called Sovereign Debt Crisis, a sub-crisis morphing out of the Great Recession in 2010 and 2011, involving Greece, Portugal, Spain, Italy and Cyprus. The Sovereign Debt Crisis is still ongoing having recently extended itself into calendar year 2013.…

    • 3797 Words
    • 16 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Monetary and Fiscal Policy
    • 1965 Words
    • 8 Pages

    Monetary and Fiscal Policy

    Heakal, R. (2004, May 19). What Is Fiscal Policy? Retrieved November 25, 2007, from http://www.investopedia.com/articles/04/051904.asp…

    • 1965 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    American Debt Crisis Essay
    • 3797 Words
    • 16 Pages

    American Debt Crisis Essay

    “US AND EU ZONE DEBT PROBLEM AND DOWNGRADE and ITS IMPACT IN GLOBAL FINANCIAL MARKET and GLOBAL ECONOMY”…

    • 3797 Words
    • 16 Pages
    Powerful Essays
    Read More
  • Better Essays

    Situation of Terrorist Hostage Taking
    • 3711 Words
    • 15 Pages

    Situation of Terrorist Hostage Taking

    "A Comprehensive EU Response to the Financial Crisis: Substantial Progress towards a Strong Financial Framework for Europe and a Banking Union for the Eurozone." EUROPA. European Commission, 19 Nov. 2013. Web. 10 Feb. 2014. .…

    • 3711 Words
    • 15 Pages
    Better Essays
    Read More
  • Best Essays

    The Eurozone crisis
    • 3510 Words
    • 9 Pages

    The Eurozone crisis

    Kirkegaard, J. F., 2011. Painful Euro Crisis and Lessons for the World Part 1. [Online]…

    • 3510 Words
    • 9 Pages
    Best Essays
    Read More
  • Best Essays

    Compare and Contrast the Response of Economic Policymakers to the Great Depression of the 1930’s and the Great Financial Crisis Today.
    • 4146 Words
    • 17 Pages

    Compare and Contrast the Response of Economic Policymakers to the Great Depression of the 1930’s and the Great Financial Crisis Today.

    The financial crisis that began in 2007-8 was the first time since the 1930’s that both the major European countries and the US had been involved in a financial crisis. In comparison, the disastrous 1931 banking crisis involved countries that accounted for 55.6 per cent of world GDP, whereas the banking crisis of 2007-8 only involved countries that accounted for 33.5 per cent of world GDP. Though, all the key economic variables fell at a faster rate during the first year of the later crisis. Keynes had argued in 1931 that ‘there is a possibility that when this crisis is looked back upon by the economic historian of the future it will be seen to mark one the major turning points.’ Keynes was correct. As a result of the lessons that were learned, policy in response to the Great Financial Crisis has contrasted sharply with policy during the Great Depression era. I will examine how national policy responses and international co-operation have differed, as well as highlighting how in creating the Euro, policymakers have unwittingly replicated many of the structural weaknesses of the Gold Standard. I will also consider how policy in the recovery phase has so far compared to policy during the recovery from the Great Depression.…

    • 4146 Words
    • 17 Pages
    Best Essays
    Read More

Related Topics