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Annual Meeting of the Deutsch-Nordische Juristenvereinigung

Annual Meeting of the Deutsch-Nordische Juristenvereinigung. Mikael Stenström Assistant General Counsel ECB. 13 September 2002. Overview of topics. Institutional and legal features The ECB, the Eurosystem and the ESCB Legal framework Economic analysis and the convergence criteria

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Annual Meeting of the Deutsch-Nordische Juristenvereinigung

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  1. 13/09/2002

  2. Annual Meeting of the Deutsch-Nordische Juristenvereinigung Mikael Stenström Assistant General Counsel ECB 13 September 2002

  3. Overview of topics • Institutional and legal features • The ECB, the Eurosystem and the ESCB • Legal framework • Economic analysis and the convergence criteria • Monetary policy co-ordination • Convergence reports • Legal convergence • Central bank independence • Integration of participating NCBs in the Eurosystem • The ECB and the integration of financial markets • Financial Services Action Plan • Settlement Finality Directive • Collateral Directive • The Wise Men Report, the Hague Conference and other developments in the area of securities 13/09/2002

  4. 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 History of Economic and Monetary Union 13/09/2002

  5. 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 13/09/2002

  6. 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 13/09/2002

  7. ECB, the Eurosystem and the ESCB • ECB • Legal entity under international public law • Centre of Eurosystem and ESCB • 15 shareholders national central banks (NCBs) of Member States • Share capital of 5000 million euro • As at 1 June 2002 approximately 1200 members of staff • Eurosystem • ECB and 12 NCBs of Member States that have introduced the euro • ESCB • ECB and 15 NCBs of all Member States 13/09/2002

  8. Decision-making bodies of the ECB • Governing Council • formulates monetary policy • adopts regulations, guidelines and decisions • composed of the Governors of 12 NCBs and the 6 members of the Executive Board • meets on a fortnightly basis for one day in Frankfurt • Executive Board • prepares the meetings of the Governing Council • implements the monetary policy of the Governing Council • conducts the ECB’s current business • composed of the President, Vice-President and four other members 13/09/2002

  9. Decision-making bodies of the ECB • General Council • contributes to several auxiliary functions of the ECB • composed of the Governors of the NCBs of all 15 Member States and the ECB’s President and Vice-President • meets on a quarterly basis for one day in Frankfurt 13/09/2002

  10. ESCB Committees • Monetary policy • Market operations • Payment & settlement systems • Legal • Statistics • Banking • supervision • Banknotes • International • relations • External communications • Information technology • Accounting & monetary • income • Internal audit • Budget 13/09/2002

  11. Legal acts relevant to EMU ECB legal acts 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 13/09/2002

  12. Legal acts relevant to EMU Other legal acts for the ESCB 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 13/09/2002

  13. Judicial control • The acts and omissions of the ECB are open to review and interpretation by the European Court of Justice • The ECB has jus standi before the European Court of Justice in order to protect its prerogatives 13/09/2002

  14. Legal framework for the euro • The two Council Regulations on the introduction of the euro • The two Council Regulations on the stability and growth pact • The International Agreement and Council Resolution on ERM II 13/09/2002

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  16. Legal framework for monetary policy • ECB Guideline on monetary policy instruments and procedures of the Eurosystem • General Documentation • Additional Minimum Common Features • Multilateral agreements between the ECB and the NCBs on the Correspondent Central Banking Model 13/09/2002

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  18. CCBM Links Legal framework for TARGET TARGET Guideline TARGET Agreement Settlement Finality Directive Network Service Provider National legislation regarding finality of payments ECB PaymentMechanism National RTGS rules of in-NCBs National RTGS rules of out-NCBs 13/09/2002

  19. Economic developments • Economic Developments Convergence and structural analysis • Monetary policy co-ordination Euro area, UK, SE, DK • Convergence Reports Convergence criteria and assessment 13/09/2002

  20. 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. 13/09/2002

  21. Features of central bank independence • Institutional Independence • Personal Independence • Financial Independence • Functional independence Features of central bank independence as developed by the European Monetary Institute 13/09/2002

  22. Transparency and accountability • 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); • The ECB is to publish a consolidated financial statement of the Eurosystem each week (Art. 15(2) of the ESCB Statute); • 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 13/09/2002

  23. Integration of NCBs into the Eurosystem • 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.” • 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.” 13/09/2002

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