The initial capital allocation key was determined in 1998 on the basis of the states’ population and GDP, but the capital key has been adjusted. 1 January 1999, signalling the third stage of EMU. The first President of the Bank was Wim Duisenberg, the former president of the Dutch central bank and the European Monetary Institute. Trichet replaced Duisenberg as President in November 2003. There had also been tension over the ECB’s Executive Board, with the United Kingdom demanding a seat even though it had not joined the Single Currency. When the ECB was created, it covered a Eurozone of eleven members. Since then, Greece joined in January 2001, Slovenia in January 2007, Cyprus and Malta in January 2008, Slovakia in January 2009, Estonia in January 2011, Latvia in January 2014 and Lithuania in January 2015, enlarging the bank’s scope and the membership of its Governing Council.
On 1 December 2009, the Treaty of Lisbon entered into force, ECB according to the article 13 of TEU, gained official status of an EU institution. In September 2011, when German appointee to the Governing Council and Executive board, Jürgen Stark, resigned in protest of the ECB’s bond buying programme, Financial Times Deutschland called it “the end of the ECB as we know it” referring to its perceived “hawkish” stance on inflation and its historical Bundesbank influence. On 1 November 2011, Mario Draghi replaced Jean-Claude Trichet as President of the ECB. 2013 the ECB sharply lowered interest rates to encourage economic growth, reaching the historically low 0. In November 2014, the bank moved into its new premises.
Treaty on the Functioning of the European Union, is to maintain price stability within the Eurozone. The Governing Council confirmed this definition in May 2003 following a thorough evaluation of the ECB’s monetary policy strategy. Without prejudice to the objective of price stability, the Treaty also states that “the ESCB shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union”. This section relies largely or entirely on a single source. Relevant discussion may be found on the talk page. Further tasks, among others, include the exclusive right to authorise the issuance of euro banknotes.
Eurosystem, on the other hand, uses a different method. When the repo notes come due the participating banks bid again. An increase in the quantity of notes offered at auction allows an increase in liquidity in the economy. A decrease has the contrary effect. The contracts are carried on the asset side of the European Central Bank’s balance sheet and the resulting deposits in member banks are carried as a liability. To qualify for participation in the auctions, banks must be able to offer proof of appropriate collateral in the form of loans to other entities. These can be the public debt of member states, but a fairly wide range of private banking securities are also accepted.
José Manuel González-Páramo, a Spanish member of the Executive Board since June 2004, was due to leave the board in early June 2012 and no replacement had been named as of late May 2012. The Governing Council is the main decision-making body of the Eurosystem. It will continue to exist until all EU member states adopt the euro, at which point it will be dissolved. The Supervisory Board meets twice a month to discuss, plan and carry out the ECB’s supervisory tasks. It proposes draft decisions to the Governing Council under the non-objection procedure.
It also includes the Steering Committee, which supports the activities of the Supervisory Board and prepares the Board’s meetings. It is composed by the Chair of the Supervisory Board, Vice-Chair of the Supervisory Board, one ECB representative and five representatives of national supervisors. The five representatives of national supervisors are appointed by the Supervisory Board for one year based on a rotation system that ensures a fair representation of countries. 11 billion, which is held by the national central banks of the member states as shareholders. The NCBs’ shares in this capital are calculated using a capital key which reflects the respective member’s share in the total population and gross domestic product of the EU. The ECB adjusts the shares every five years and whenever a new country joins the EU.
ECB capital stock as of 1 January 2015 are listed below. Non-Euro area NCBs are required to pay up only a very small percentage of their subscribed capital, which accounts for the different magnitudes of Euro area and Non-Euro area total paid-up capital. The contributions of each NCB is in proportion to its share in the ECB’s subscribed capital, while in return each NCB is credited by the ECB with a claim in euro equivalent to its contribution. The internal working language of the ECB is generally English, and press conferences are usually held in English.
Political independence: The Community institutions and bodies and the governments of the member states may not seek to influence the members of the decision-making bodies of the ECB or of the NCBs in the performance of their tasks. Symmetrically, EU institutions and national governments are bound by the treaties to respect the ECB’s independence. Operational and legal independence: the ECB has all required competences to achieve its price stability mandate and thereby can steer monetary policy in full autonomy and by means of high level of discretion. Governing Council members are voting along national lines. Governors of national central banks have a minimum renewable term of office of five years. In addition, ECB board members and are vastly immune from judicial proceedings.