We strive to be transparent, accessible and understood by all citizens
We are the central bank of the euro area and serve more than 346 million European citizens. We work to keep prices stable and help to keep banks safe.
Want to find out more about us, what we do, and how it affects you? Click on any of the topics below to find the answers to the most common questions, or scroll to the bottom of the page to ask us your own question!
About the ECB
The European Central Bank (ECB) is the central bank of the euro area and manages the amount of money in circulation. Our main objective is to maintain stable prices, and the main way that we do this is by setting appropriate interest rates.
We are also responsible for supervising banks within the framework of the Single Supervisory Mechanism (SSM).Explainer: What is a central bank? The ECB and the Eurosystem explained in three minutes The SSM explained in three minutes
Our actions are guided by the principles of transparency, independence and accountability.
The ECB is not a commercial bank providing banking services to individuals and companies. We do not contact citizens to offer loans or savings accounts, nor do we have an online banking website.
Neither does the ECB:
- get involved in money transfers
- collect cross-border transfer fees
- accept deposits from third parties
- block funds or issue certificates for the release of funds
There are currently 24 official EU languages, and you can communicate with us in any of them. The languages we use to communicate with citizens depend on the target audience and the specific circumstances. The ECB publishes legal acts in all official EU languages, and its working language is English.
Together, the central banks of all EU countries own the ECB. Each country’s share of the ECB’s capital corresponds to its population and its gross domestic product (GDP), which have equal weighting. The countries that use the euro pay in more capital than those that don’t. These various factors create what is called the capital key, which determines the amount paid in by each national central bank.Explainer: Who owns the ECB?
The ECB makes profits and incurs losses, just like other institutions. The net profits and losses of the ECB are distributed among the national central banks of the euro area. The Statute of the ESCB states that up to 20% of any profits can be kept as reserves, while the remaining profits must be distributed to the shareholders of the ECB in proportion to their paid-up shares. Any losses can be offset against the general reserves, the income for the year or the amounts allocated to each national central bank.Explainer: Does the ECB make a profit?
The Governing Council has expressed its full support for the people of Ukraine.
We have implemented the sanctions imposed by the EU and European governments, and we stand ready to take whatever action is needed to ensure price and financial stability in the euro area.
Find out more:Press release of 25 February 2022 More on the Russian invasion of Ukraine FAQs on the invasion of Ukraine and ECB Banking Supervision
The ECB’s monetary policy encompasses all decisions that are taken to influence the cost of and access to money in order to meet our price stability objective. Our primary monetary policy instrument is the set of key ECB interest rates. Any change in these rates affects – with a time lag of several months – interest rates across the whole economy, particularly the rates at which commercial banks lend money to individuals and companies. If necessary, we can also use other tools to help us achieve our primary objective of price stability.Recent monetary policy decisions Our price stability objective and the strategy review Christine Lagarde: Interview with Redaktionsnetzwerk Deutschland
Price stability is the ECB’s primary objective, as set out in Article 127 of the Treaty on the Functioning of the European Union. The Governing Council considers that price stability is best maintained by aiming for 2% inflation over the medium term, as measured by the Harmonised Index of Consumer Prices (HICP).
Stable prices make it easier for individuals to plan spending and encourage companies to invest. They also help to maintain confidence in our currency by stabilising the quantity of goods and services that can be purchased with a given amount of euro.Explainer: Why are stable prices important? Why is our inflation target 2%?
We consider the Harmonised Index of Consumer Prices (HICP) to be the appropriate measure for assessing the achievement of the price stability objective.
The HICP measures consumer price inflation – i.e. changes over time in the prices of consumer goods and services purchased by euro area households.
The HICP is “harmonised” because all EU countries use the same methodology. This ensures that data for one country can be compared with data for another.
The HICP is compiled by Eurostat and national statistical institutes in accordance with harmonised statistical methods.
The current high levels of inflation are being driven by three main factors. First of all, higher energy prices are pushing up inflation, as oil, gas and electricity have become more expensive. Second, prices are also going up because demand is rising more rapidly than supply while companies are finding it difficult to keep up as they rebuild supply chains that were damaged by the pandemic. Third, prices were exceptionally low at the height of the pandemic. Comparing today’s higher prices with those very low levels makes differences seem large.Explainer: Why is inflation currently so high? Christine Lagarde: Interview with Redaktionsnetzwerk Deutschland Isabel Schnabel: Interview with Jung & Naiv (available in German)
When inflation over the medium term is expected to be below the 2% target, the ECB tries to stimulate the economy using the key ECB interest rates and other tools. Setting a low interest rate helps banks to lend money cheaply, which in turn increases investment and consumption in the economy. Low interest rates also boost the value of assets (e.g. pensions and housing), which also encourages spending. All of this translates into more activity and growth, which boosts inflation.Explainer: Why are interest rates low?
Asset purchases involve the central bank buying assets such as government or corporate bonds with the aim of reducing longer-term interest rates when there is a risk of inflation remaining low. This helps the economy by boosting consumption and investment, ultimately helping price pressures to build up and bringing inflation up to the 2% target.Explainer: How asset purchases work
We published our new monetary policy strategy on 8 July 2021. Since the previous strategy review in 2003 the euro area economy and the global economy have undergone profound changes. The implications of reduced productivity and altered demographics and the legacy of the financial crisis have reduced our ability to achieve our objectives by changing key interest rates alone. In addition, globalisation, digitalisation, the threat to environmental sustainability and changes in the financial system all present challenges for the conduct of monetary policy.
While our mandate is conferred by the Treaties, it is up to us to devise our monetary policy strategy. This strategy describes how we intend to achieve our primary objective of price stability in the euro area using an appropriate set of monetary policy instruments. The new strategy sees the ECB aiming for a symmetrical inflation target of 2%, implying that inflation which is lower than the target is just as undesirable as inflation which is too high.More on the strategy review
The aim of European banking supervision is to ensure the safety and soundness of the European banking system, to increase financial integration and stability, and to ensure consistent supervision.The ECB Explains: European banking supervision
The Single Supervisory Mechanism (SSM) is the system of banking supervision in Europe. It comprises ECB Banking Supervision and the national supervisory authorities of the participating countries.SSM explained in three minutes
No, consumer protection and the fight against money laundering fall outside of the ECB's remit, with national authorities remaining responsible for these issues. If you have a complaint about your bank, please contact it directly or address your complaint to the relevant national authority.National competent authorities The fight against money laundering
We encourage anyone to report suspected breaches of relevant Union law directly to us via our whistleblowing platform. The ECB ensures appropriate protection for both those who report breaches and those who are accused of them, as well as of all personal data involved.
We at the ECB think it’s vital for information to be accessible. We aim to be as transparent as possible, while at the same time ensuring the confidentiality when it comes to the question of how we perform our tasks.
Information on individual supervised banks is specifically protected by a number of professional secrecy requirements, as outlined in European law (e.g. the Capital Requirements Directive).
Access to ECB documents is governed by Decision ECB/2004/3 of 4 March 2004, as amended. In line with our commitment to openness and transparency we have created a Public Register of Documents to enable and facilitate research.See the Public Register of Documents
Banks supervised directly by the ECB are called significant institutions, while those we supervise indirectly are called less significant institutions.List of the entities supervised by the ECB
Supervisors assess the risks faced by banks and check that they are equipped to manage those risks properly. This is called the Supervisory Review and Evaluation Process (SREP), and its purpose is to allow banks’ risk profiles to be assessed in a consistent manner and allow decisions about any necessary supervisory measures to be taken.Find out more about the SREP on the banking supervision website
Supervisors use stress tests to see how well banks can cope with financial and economic shocks. The results of stress tests help supervisors to identify banks’ vulnerabilities and address them at an early stage as part of their supervisory dialogue.Find out more about stress tests on the banking supervision website
The euro and payments systems
The creation of the euro was an impressive achievement, bringing the people of Europe together by allowing them to travel, study and work abroad much more easily and safely. The Treaty of Maastricht was one of the most important milestones in the process of European integration, and one thing that it did was to pave the way for the creation of a common currency.How have Europeans benefited from the euro?
The ECB is exploring the possibility of introducing a digital euro. This would be an electronic form of money issued by the Eurosystem. It would be central bank money and therefore risk-free. Currently, cash is the only central bank money used for retail payments. A digital euro would be an additional way of making payments in euro, not replacing cash but rather complementing it. It would be convertible (on a one-to-one basis) into all other forms of euro, such as banknotes.
A digital euro would combine the efficiency of a digital payment instrument with the safety of central bank money. It would help the EU to remain independent of digital payment methods issued and controlled from outside the euro area. It would also secure financial stability and monetary sovereignty, and help to maintain trust in payments in the digital age.
Crypto-assets are fundamentally different from central bank money: their prices are extremely volatile, which makes them hard to use as a means of payment or a unit of account. Crypto-assets have no intrinsic value and no public institution backing them. There are similar concerns about stablecoins: their reliability ultimately depends on the issuing entity and the underlying assets. They are also dependent on the issuer honouring its promise to keep the value of the coins stable over time.
A digital euro, on the other hand, would be central bank money. This means that it would be issued by a central bank and would be designed to meet the needs of citizens: as well as respecting privacy, it would also be risk-free.
Experts from the Eurosystem have established a number of basic requirements to help us see what a digital euro might look like. These include easy accessibility, robustness, safety, efficiency, privacy and compliance with the law. A digital euro would be designed to be interoperable with existing payment services, facilitating the provision of pan-European payments and other services to consumers.
The ECB and the national central banks of the Eurosystem are responsible for safeguarding the integrity of euro banknotes and preserving public confidence in them. In December 2021 the ECB began examining a new theme and new designs for the euro banknotes, seeking to make them more relatable to European citizens and ensure that the banknotes and their security features incorporate the best available technology.
A final decision on the production and issuance of new banknotes will not be taken until the redesign process has been completed in 2024.Press release on the redesign process
€500 banknotes are no longer being issued. They do, however, continue to be legal tender, so you can still use them as a means of payment and a store of value.More about the €500 banknote
Images of euro banknotes can be used for non-professional purposes without our prior authorisation, so long as you comply with all existing rules (in particular Article 2 of Decision ECB/2013/10) to ensure that the reproduction is never confused with a genuine banknote (as this would harm trust in the euro).
If you wish to use high-resolution images of euro banknotes for professional purposes, you must contact us at Euro-Banknotes-Images@ecb.europa.eu so that we can assess your case. If your request is approved you will be sent the relevant electronic images.
TARGET2 is a payment system owned and operated by the ECB and the national central banks. It is the most commonly used platform for large-volume payments by central banks and commercial banks. The ECB and the national central banks cannot provide information on the status of individual bank transfers, whether within the euro area or internationally.More information on TARGET2
TIPS is a market infrastructure service that was launched by the ECB and the national central banks in 2018. It enables payment service providers to offer real-time fund transfers to their customers around the clock. Thanks to TIPS, instant payments can now be made quickly and safely.More information on instant payment settlement
What is our cash strategy? Why is cash important? How do people in the euro area like to pay?Find the answers to these questions here
Why are payment systems so important?Visit the payments and markets section of our website
More frequent and intense natural disasters have a negative impact on the economy and the financial system. They can affect economic growth, inflation and the way in which monetary policy feeds through to people and businesses. This has consequences for price stability, which is the ECB’s primary mandate. We have therefore included climate change considerations in our monetary policy framework.
The ECB is doing this in four ways:
- Economic analysis: adapting and improving models, forecasting methods, and risk assessments
- Banking supervision: developing better analysis of the risks in banks’ portfolios
- Monetary policy: incorporating the effects of climate change into modelling and investment portfolios (sustainability aspects of bonds)
- Financial stability
The climate change centre harnesses internal expertise and shapes our climate agenda, in close cooperation with the various business areas that make up the ECB. The centre’s activities range from monetary policy to prudential functions. We have also decided to invest part of the ECB’s funds portfolio in the euro-denominated green bond fund run by the Bank for International Settlements.Press release on the climate change centre
As a result of our strategy review, the ECB’s Governing Council has implemented an ambitious roadmap with a view to integrating climate change considerations into our work.Press release on the action plan to include climate change considerations in the monetary policy strategy
At the moment, the ECB holds around a fifth of the eligible green corporate bonds. The issuance of green bonds is typically concentrated in sectors such as utilities, infrastructure, transport and construction. Companies in these sectors issue green bonds to finance the adoption of more efficient technologies, reduce their carbon footprints and reorient their energy portfolios towards renewable sources.
Although central banks are not the main actor when it comes to fighting climate change, it is clearly an issue that affects our primary mandate of price stability and has an impact on our monetary policy strategy.
Would you like to find out more about how the ECB is approaching the issue of climate change?More on climate change and the ECB
Climate-related and environmental risks are becoming increasingly important for banks. Find out how extreme weather events can affect banks and what they can do to maintain their important role as lenders and contribute to the transition to a low-carbon economy.Video: Why should banks care about climate change? Press release: ECB Banking Supervision launches 2022 climate risk stress test
Our coronavirus response
In 2020 and 2021 the ECB put in place a set of monetary policy and banking supervision measures to mitigate the pandemic’s impact on the euro area economy and support all European citizens.Our response to the pandemic
On 10 February 2022 we announced the end of the last temporary relief measures still available to banks.
These FAQs provide details of pandemic-related measures that ECB Banking Supervision implemented in 2020 and 2021.
The pandemic emergency purchase programme (PEPP) is an asset purchase programme which was launched in March 2020 to help counter the negative effects of the coronavirus pandemic. The aim of the PEPP was to help citizens, companies and governments to access the funds they required on favourable terms, helping the economy to weather the challenges presented by the pandemic.
We offered long-term funding to banks to help support lending to households and companies (including small and medium-sized firms). The interest rate charged for these funds was reduced, incentivising banks to increase their lending. We also expanded the list of assets that banks could use as collateral (which acts as a form of insurance when banks borrow from us). Together, these measures helped to maintain bank lending activity to households and firms throughout the pandemic.Tell me: What is collateral?
The number of cyber incidents reported to the ECB has increased during the pandemic, with a 54% increase in 2020 relative to 2019. Protecting critical services (such as access to the financial system) from attacks and outages is crucial. Through its cyber incident reporting framework and the Joint Supervisory Teams’ review of banks’ responses to an annual IT risk questionnaire, the ECB gauges banks’ exposure to IT risks and assesses their risk management in order to make the EU’s financial sector stronger and more digitally resilient.Read our article: IT and cyber risk: a constant challenge
Against the background of the heightened systemic uncertainty and economic stress created by the pandemic, the ECB recommended on 27 March 2020, as an exceptional measure, that banks temporarily suspend all cash dividends and share buy-backs. Preserving capital was necessary to ensure prudent capital planning and for banks to retain their capacity to support the economy.
On 23 July 2021 the ECB decided not to extend that dividend recommendation beyond September 2021.
Fraud – misuse of ECB name and logo
The ECB does not provide commercial banking services. Our identity is sometimes misused in connection with fake financial transactions and other fraudulent activities. Our staff members might also be impersonated or mentioned in scams, and our name and logo might also be misused.Find out more about misuse of the ECB name and what you can do
Consumer protection and anti-money laundering fall outside the mandate of the ECB
Tasks such as relations between banks and their clients (consumer protection) as well as the fight against money laundering are outside the scope of our responsibilities and remain within the remits of the national supervisory authorities.Anti-money laundering information