Answer to Question #199641 in Macroeconomics for Joseph

Question

How is the Governing Council of the ECB composed, what is its competence?

Answer 1

The governing council of the ECB is the main decision making body and is composed of the following:

Consists of the Executive Board and the governors of the national central banks of all the eurozone countries.

The Executive Board handles the everyday operations of the ECB. This board is composed of the ECB President, Vice-President and 4 other members appointed by the leaders of the eurozone countries to serve an 8-year term.

There is also the general council also comprising of the ECB president, Vice-President and the governors of the central banks from all European Union countries.

The Competence of the ECB are as stated below:

They work to keep prices in the European area stable so as to maintain the value of the Euro.

They also work to to enhance the security of the European Banking system so that the money of the citizens is safe while in the bank.

Other functions of the ECB are listed as:

Banking supervision

Statistics

Macroprudential policy

International and European Cooperation