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What is the European Central Bank?

European Central Bank Definition. The European Central Bank, or ECB, is the Central Bank for the European Monetary Union. It is Europe’s equivalent of the Federal Reserve Bank. The Frankfurt-based European Central Bank manages and administers the Euro, and the Eurosystem is comprised of central banks from each Eurozone country. The ECB is independent and has sole authority for setting monetary policy. The Eurosystem is responsible for printing, minting and distribution of notes and coins in all Member States, and for the operation of the Eurozone payment systems. The institution sets Eurozone interest rates to maintain price stability and control inflation. The ECB has a six-person board, headed by a president. The board and central bank governors from each participating country make monetary policy decisions.


Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.