The European Central Bank or the ECB is the central bank of the European Union and the one who administers monetary policies within the Eurozone, which is comprised of 19 European state members and is known to be one of the largest currency areas in the world. The bank was first formed in Germany in June 1998 and works with the other national banks of each of its European Union members.
The ECB’s primary objective is to maintain price stability within the Eurozone while its basic task is to set and implement monetary policies for the Eurozone along with conducting foreign exchange operations, taking care of foreign reserves of the European System of Central Banks.
It is also governed directly by the European law; despite this the structure of the ECB itself is somewhat similar to corporations. This is because the ECB has its own set of shareholders and stock capital. Despite being under the European law, the ECB maintains a degree of independence in the form of a treaty which requires both institutions of the European Union and its national governments to give due respect to the ECB’s independence. In order to provide some accountability, it is required to publish reports regarding its activities and is required to annually report these to the European Parliament, the European Commission, the Council of the European Union, and the European Council. Additionally, it is the European Parliament that is given the freedom to question and then afterwards issue its opinion regarding candidates to the executive board.
Governors of the national central banks, who are representatives in the ECB’s governing council, are appointed by their respective national representatives and can be reappointed again.