EUROPEAN CENTRAL BANK
ECB is completely independent. Neither the ECB, the national central banks in the euro system, nor any member of their decision-making bodies can ask for or accept instructions from any other body. All EU institutions and governments must also respect this principle.
OBJECTIVES OF ECB
- The primary objective of ECB shall be to maintain price stability
- Shall support the general economic policies in the union with a view to contributing to the
- Achievement of the objectives of the union
- The ECB shall act in accordance with the principle of an open market economy with free competition
MONETARY POLICY OF ECB
Monetary Policy Instruments of The ECB
# Open Market Operations
It is an important tool for managing interest rates, market liquidity, and signaling the next policy movement.
# Standard Facilities
To provide and absorb overnight liquidity and also to signal the general monetary policy stance
and bound overnight market interest rates.
# Minimum Reserves
The Governing Council of the ECB has decided to apply minimum reserves as an integral part of the operational framework for the monetary policy in Stage Three. It Provides stability of money market interest rates.