Decision-making by the Eurosystem and the European System of Central Banks (ESCB) is centralised, while the implementation of decisions is decentralised via national central banks.
The Eurosystem and ESCB are headed by the ECB’s decision-making bodies: the Governing Council and the Executive Board, and also the General Council and the Supervisory Board.
The Governing Council is the main decision-making body of the ECB and is responsible for taking important strategic decisions, key to the functioning of the Eurosystem. It comprises the members of the Executive Board of the ECB and the governors of the national central banks of the euro area countries.
The Governing Council of the ECB defines the monetary policy for the euro area. In this respect, the Governing Council defines the ECB's monetary policy strategy and its operational framework, meaning that the Governing Council is responsible for strategic monetary policy decisions.
Other responsibilities relate to the following:
- the issue of guidelines necessary for carrying out the tasks of the national central banks;
- the adoption of regulations, which the ECB may adopt in application of the Treaty on the Functioning of the European Union or by delegation from the EU Council;
- the exclusive right to approve the issue of banknotes, and the number thereof, in the euro area;
- the definition of rules necessary for the standardisation of accounting and reporting operations carried out by the national central banks;exercising the right of initiative for EU legislation and fulfilment of the ECB's advisory function, as well as decisions regarding the international role of the Eurosystem;
- decisions regarding the allocation of the ECB's financial resources and the adequacy of financial results, as well as the adoption of rules that govern the allocation of monetary income to euro area national central banks;
- the adoption of the ECB's annual report and financial statements.
The Governing Council is also the highest decision-making body for the entire ECB administration. It is responsible for adopting rules of procedure that determine the internal organization of the ECB and its decision-making bodies. The Governing Council also defines conditions for the employment of Executive Board members and employees of the ECB and determines the ECB's budget. Furthermore, the Governing Council adopts decisions with regard to bringing action and dismissing governors of national central banks before the court.
When Lithuania joined the euro it took the number of members of the Governing Council to 25. As a result, rules entered into force on the rotation of the voting rights of members of the Governing Council. The governors are divided into two groups on the basis of economic and financial criteria. The five governors who comprise the first group share four voting rights. The 14 governors in the second group, including the Governor of the Bank of Slovenia, share 11 voting rights. Voting rights are rotated at monthly intervals.
The Governing Council typically meets twice a month in Frankfurt am Main, Germany. The Governing Council meets every six weeks to make decisions on monetary policy (monetary policy meetings). The minutes of ECB monetary policy meetings are published around four weeks after the meeting.
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The Executive Board is the operational decision-making body of the ECB, enabling the latter to adapt and react quickly to changing conditions on capital and money markets. The Executive Board also discusses individual matters and matters of urgency. The Executive Board comprises six members. Its tasks are as follows:
- to prepare Governing Council meetings;
- to implement monetary policy for the euro area in accordance with the guidelines
- specified and decisions taken by the Governing Council;
- to manage the day-to-day matters of the ECB;
- to exercise certain powers delegated to it by the Governing Council, including tasks of a regulatory nature.
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As long as there are EU Member States that have not adopted the euro, the General Council serves as the ECB's third decision-making body. The General Council comprises the President and the Vice-President of the ECB and the governors of the national central banks of all EU Member States.
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The Supervisory Board, which discusses, plans and carries out tasks in banking supervision (Single Supervisory Mechanism), is answerable to the Governing Council. Representatives of national banking supervisors, among them the vicegovernor of the Bank of Slovenia, sit on the Supervisory Board.
The Supervisory Board meets twice a month as a rule. It proposes draft decisions to the Governing Council under the non-objection procedure.
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