The Eurosystem is the monetary authority of the euro area.
It comprises the European Central Bank (ECB) and the national central banks of the Member States that have adopted the euro.
The ECB and the national central banks together perform the tasks relating to the single currency. The Treaty establishing the European Community and the Statute of the European System of Central Banks and the European Central Bank (Statute of the ESCB) form the legal basis of the ESCB.
Mission of the Eurosystem
The primary objective of the Eurosystem is to maintain price stability, which is defined by the Governing Council of the European Central Bank as inflation rates of below but close to 2% over the medium term.
Without prejudice to the objective of price stability, the Eurosystem supports the general economic policies of the EU with a view to contributing to the achievement of the objectives of the EU. These include inter alia, high employment and balanced economic growth). Acting also as a financial authority, the Eurosystem aims to safeguard financial stability and promote European financial integration.
Tasks of the Eurosystem
The Eurosystem is responsible for:
- defines and implements the monetary policy of the euro area;
- conducts foreign exchange operations;
- holds and manages the official foreign currency reserves of euro area Member States;
- promotes the smooth operation of payment systems;
- issues euro banknotes, as the sole legal tender banknotes in the euro area;
- collects statistical information necessary for the performance of the Eurosystem’s tasks;
- contributes to the smooth conduct of policies pursued by the competent authorities relating to the prudential supervision of credit institutions and the stability of the financial system; and
- cooperates with international organisations on issues such as global development and macroeconomic stability.