• The Global Transparency Resource
• Importance of Transparency
• IFI's Introduced
  • AfDB - African Development Bank
  • ADB - Asian Development Bank
  • BIS - Bank for International Settlements
  • BSTDB - Black Sea Trade and Development Bank
  • CDB - Caribbean Development Bank
  • CEB - Council of Europe Development Bank
  • EBRD - European Bank for Reconstruction and Development
  • ECB - European Central Bank
  • EIB - European Investment Bank
  • IADB - Inter-American Development Bank
  • IFC - International Finance Corporation
  • IMF - International Monetary Fund
  • IsDB - Islamic Development Bank
  • OECD - Organisation for Economic Co-operation and Development
  • WB - World Bank
  • WTO - World Trade Organisation

ECB European Central Bank (Frankfurt, Germany)

The European Central Bank is not surprisingly the central bank of Europe. Most countries have a central bank in order to regulate their monetary policy. However in Europe with a common currency it is not possible for the member countries to have their own central bank since they all have to follow the same monetary policy. As a result when the Euro went into circulation the European Central Bank came into existence as well.

The European Central Bank was created when the Euro became the common currency of Europe. At this point it became necessary to have one bank that could coordinate monetary policy. The bank was created to replace the central banks of all of the countries that use the Euro as their currency. In addition to their role in monetary policy the bank also handles foreign exchange operations and takes care of Europe's foreign reserves. In addition it is responsible for issuing the banknotes that are used in the Eurozone countries.

Although it fills the role of central bank for Europe there is an important difference between the way that the European Central Bank works and other central banks work and that is in their objectives. Most central banks have to balance their priorities between encouraging economic growth and keeping inflation down. However the European Central Bank has keeping inflation under control as its primary goal, everything else is secondary to that. In a lot of ways this simplifies the role of the bank. It is necessary to follow this policy in large part because many of the nations would have conflicting goals which would make it impossible to decide between economic growth and keeping inflation under control.

There is another way in which the European Central Bank differs from other central banks and that is in the way that it intervenes to control inflation. Most central banks do this by issuing bonds however the ECB can't do this because they have no source of taxes with which to pay back the bonds. Instead they have to make loans to their member banks who can then loan out the money that they have borrowed. Changing the amount that they lend out will change the value of the Euro and control inflation.

Like all central banks the ECB also plays the role of maintaining a stable banking system. They do this in a number of different ways; the most important is that they make loans to banks that need money to meet their obligations. This is the role of lender of last resort that all central banks play. They will also make loans when it is not strictly necessary in order to keep the banking system running properly. They also play a role in overseeing the banking sector to make sure that the member banks are operating in the way that they are supposed to.