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13/09/2002
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Annual Meeting of the
Deutsch-Nordische Juristenvereinigung
Mikael Stenström
Assistant General Counsel
ECB
13 September 2002
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Overview of topics
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Institutional and legal features
– The ECB, the Eurosystem and the ESCB
– Legal framework
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Economic analysis and the convergence criteria
– Monetary policy co-ordination
– Convergence reports
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Legal convergence
– Central bank independence
– Integration of participating NCBs in the Eurosystem
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The ECB and the integration of financial markets
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Financial Services Action Plan
Settlement Finality Directive
Collateral Directive
The Wise Men Report, the Hague Conference and other developments in
the area of securities
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History of Economic and Monetary Union
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1952
European Coal and Steel Community
1958
European Economic Community -Treaty of Rome
1964
Committee of Governors of the Member States of the European
Economic Community
1979
European Monetary System
1992
Economic and Monetary Union (EMU ) -Treaty of Maastricht
1994
European Monetary Institute (EMI)
1998
European Central Bank (ECB)
1999
Introduction of euro
2002
Introduction of euro banknotes and coins
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Objectives and tasks of the Eurosystem
Objectives
• primary objective to maintain price stability
• secondary objective to support the general economic policies of
the Community
Main tasks
• define and implement monetary policy
• conduct foreign exchange operations
• hold and manage the official reserves of the euro area Members
States
• promote the smooth operation of payment systems
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Objectives and tasks of the Eurosystem
Other tasks
• contribute 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
• submit opinions to Community institutions or to
national authorities on matters in its field of competence
• collect and standardise statistical data
• international representation of the ESCB
• issue of banknotes
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ECB, the Eurosystem and the ESCB
ECB
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Legal entity under international public law
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Centre of Eurosystem and ESCB
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15 shareholders national central banks (NCBs) of Member States
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Share capital of 5000 million euro
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As at 1 June 2002 approximately 1200 members of staff
Eurosystem
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ECB and 12 NCBs of Member States that have introduced the euro
ESCB
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ECB and 15 NCBs of all Member States
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Decision-making bodies of the ECB
Governing Council
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formulates monetary policy
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adopts regulations, guidelines and decisions
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composed of the Governors of 12 NCBs and the 6
members of the Executive Board
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meets on a fortnightly basis for one day in Frankfurt
Executive Board
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prepares the meetings of the Governing Council
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implements the monetary policy of the Governing
Council
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conducts the ECB’s current business
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composed of the President, Vice-President and four other
members
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Decision-making bodies of the ECB
General Council
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contributes to several auxiliary functions of the ECB
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composed of the Governors of the NCBs of all 15
Member States and the ECB’s President and
Vice-President
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meets on a quarterly basis for one day in Frankfurt
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ESCB Committees
• Monetary policy
• Statistics
• External communications
• Market operations
• Banking
• Information technology
• Payment & settlement
systems
• Legal
supervision
• Banknotes
• International
relations
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• Accounting & monetary
income
• Internal audit
• Budget
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Legal acts relevant to EMU
ECB legal acts
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Regulations
Directly applicable in all Member States,
even though they are binding only in the
euro area Member States
Decisions
Binding in their entirety upon addressees
Recommendations
No binding force
Opinions
No binding force
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Legal acts relevant to EMU
Other legal acts for the ESCB
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ECB Guidelines
Binding on NCBs. Usually requires
implementation through national legal
acts
ECB Instructions
Binding on the NCB to which they are
addressed
Intra-ESCB Agreements
Binding
National statutory or
contractual provisions
Binding
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Judicial control
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The acts and omissions of the ECB are open to review and
interpretation by the European Court of Justice
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The ECB has jus standi before the European Court of
Justice in order to protect its prerogatives
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Legal framework for the euro
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The two Council Regulations on the introduction of the
euro
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The two Council Regulations on the stability and growth
pact
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The International Agreement and Council Resolution on
ERM II
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Legal framework for monetary policy
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ECB Guideline on monetary policy instruments and
procedures of the Eurosystem
– General Documentation
– Additional Minimum Common Features
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Multilateral agreements between the ECB and the NCBs
on the Correspondent Central Banking Model
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Legal framework for TARGET
TARGET
Guideline
Network
Service
Provider
ECB
Payment
Mechanism
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TARGET
Agreement
CCBM
National RTGS
rules of in-NCBs
Settlement Finality
Directive
Links
National
RTGS rules of
out-NCBs
National legislation
regarding finality of
payments
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Economic developments
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Economic Developments
Convergence and structural analysis
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Monetary policy co-ordination
Euro area, UK, SE, DK
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Convergence Reports
Convergence criteria and assessment
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Central bank independence
Article 108 of the Treaty
When exercising the powers and carrying out the tasks and duties
conferred upon them by this Treaty and the Statute of the ESCB,
neither the ECB, nor a national central bank, nor any member of
their decision-making bodies shall seek or take instructions from
Community institutions or bodies, from any government of a
Member State or from any other body.
The Community institutions and bodies and the governments of the
Member States undertake to respect this principle and not to seek
to influence the members of the decision-making bodies of the ECB
or of the national central banks in the performance of their tasks.
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Features of central bank independence
Features of central bank independence as developed by
the European Monetary Institute
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Institutional Independence
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Personal Independence
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Financial Independence
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Functional independence
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Transparency and accountability
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The ECB has to draw up and publish reports on the activities of
the ESCB at least quarterly (Art. 15(1) of the ESCB Statute);
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The ECB is to publish a consolidated financial statement of the
Eurosystem each week (Art. 15(2) of the ESCB Statute);
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The ECB has to address an annual report on the activities of the
ESCB and on the monetary policy of both the previous and the
current year (Art. 113(3) of the Treaty);
 The ECB exceeds these requirements through monthly press
conferences and publications, including a Monthly Bulletin and a
Legal Compendium containing ECB legal acts
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Integration of NCBs into the Eurosystem
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Article 14.3 of the ESCB Statute
“The national central banks are an integral part of the ESCB
and shall act in accordance with the guidelines and instructions
of the ECB. The Governing Council shall take the necessary
steps to ensure the compliance with the guidelines and
instructions of the ECB and shall require that any necessary
information be given to it.”
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Article 12.1 of the ESCB Statute
“To the extent deemed possible and appropriate and without
prejudice to the provisions of this Article, the ECB shall have
recourse to the national central banks to carry out operations
which form part of the tasks of the ESCB.”
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