European Central Bank

The European Union’s central bank sets monetary policy for the euro area and directly supervises significant banks in participating countries.

Monetary policy: Central-bank actions that influence money, credit, interest rates, and economic activity. The ECB’s primary mandate is to maintain price stability through euro-area monetary policy.
Euro: The common currency used by 20 European Union member states. The ECB conducts monetary policy for the countries that have adopted this currency.
Single Supervisory Mechanism: The European framework under which the ECB and national authorities supervise banks. It gives the ECB direct supervisory responsibility for significant euro-area banks.
European Monetary Union: The process and institutional framework through which European countries adopted a common currency and coordinated monetary policy. The ECB was created to conduct the common monetary policy envisioned by monetary union.
Federal Reserve: The central banking system of the United States, responsible for monetary policy and financial stability. Unlike the Federal Reserve, the ECB serves a currency union of sovereign states.
Governing Council of the European Central Bank: The ECB’s main decision-making body for monetary policy and other central-bank tasks. It sets key interest rates and determines the euro area’s monetary-policy stance.
Euro area: The group of European Union countries that use the euro as their currency. It defines the territory in which the ECB sets a single monetary policy.
Banking supervision: The monitoring and regulation of banks to promote safety, soundness, and compliance. The ECB supervises major banks as part of the European banking union.
Delors Report: A 1989 report proposing a three-stage process for establishing European economic and monetary union. Its blueprint shaped the timetable and institutional design that led to the ECB.
Bank of England: The United Kingdom’s central bank, responsible for monetary policy and financial stability. The ECB sets policy for multiple countries; the Bank of England serves one state.

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