Of the European Union institutions, this one is the least likely to affect British people. Why? Because the European Central Bank predominantely affects Eurozone countries. But what of the UK? As the economy of the EU is so intertwined, instability in one Eurozone country can affect the non-Eurozone countries.
The ECB sets commercial interest rates in the Eurozone – this means it controls the supply of money, and controls inflation. It also controls the Eurozone’s foreign currency reserves to balance exchange rates. One of the most important roles is to supervise the financial institutions and markets in Eurozone countries. These tasks can affect the UK in the form of a domino effect.
The ECB is ran by three bodies, plus a President. The President represents the ECB at meetings. The three bodies are the General Council, the Executive Board, and the Governing Council. The General Council consists of the ECB President and Vice-President, and the Governors of the Central Banks of all EU countries – Mark Carney, the Governor of the Bank of England sits on the General Council. It fills a more advisory and coordination-based role than the other two branches.
Next comes the Executive Board, which consists of the ECB President and Vice-President, and four other members appointed by the leaders of Eurozone countries. The Board handles the day-to-day running of the ECB.
The Executive Board sits on the final body, the Governing Council. They make up half of it, with the other half being the Governors of the Central Banks of Eurozone countries. This Council is the main decision-making body of the ECB.
Together, these institutions try and keep European monetary policy stable and co-ordinated to promote growth and jobs across the EU.
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