Functions
Since not all the EU states have joined the euro, the ESCB could not be used as the monetary authority of the eurozone. For this reason the Eurosystem (which excludes all the NCBs which have not adopted the euro) became the institution in charge of those tasks which in principle had to be managed by the ESCB. In accordance with the treaty establishing the European Community and the Statute of the European System of Central Banks and of the European Central Bank, the primary objective of the Eurosystem is to maintain price stability (in other words control inflation). Without prejudice to this objective, the Eurosystem shall support the general economic policies in the Community and act in accordance with the principles of an open market economy.
The basic tasks to be carried out by the Eurosystem are (art. 127 TFEU):
- to define and implement the monetary policy of the eurozone;
- to conduct foreign exchange operations;
- to hold and manage the official foreign reserves of the Member States; and
- to promote the smooth operation of payment systems.
In addition, the Eurosystem 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. The ECB has an advisory role vis-à-vis the Community and national authorities on matters which fall within its field of competence, particularly where Community or national legislation is concerned. Finally, in order to undertake the tasks of the ESCB, the ECB, assisted by the NCBs, has the task of collecting the necessary statistical information either from the competent national authorities or directly from economic agents.
Read more about this topic: European System Of Central Banks
Famous quotes containing the word functions:
“One of the most highly valued functions of used parents these days is to be the villains of their children’s lives, the people the child blames for any shortcomings or disappointments. But if your identity comes from your parents’ failings, then you remain forever a member of the child generation, stuck and unable to move on to an adulthood in which you identify yourself in terms of what you do, not what has been done to you.”
—Frank Pittman (20th century)
“Nobody is so constituted as to be able to live everywhere and anywhere; and he who has great duties to perform, which lay claim to all his strength, has, in this respect, a very limited choice. The influence of climate upon the bodily functions ... extends so far, that a blunder in the choice of locality and climate is able not only to alienate a man from his actual duty, but also to withhold it from him altogether, so that he never even comes face to face with it.”
—Friedrich Nietzsche (1844–1900)
“Those things which now most engage the attention of men, as politics and the daily routine, are, it is true, vital functions of human society, but should be unconsciously performed, like the corresponding functions of the physical body.”
—Henry David Thoreau (1817–1862)