The BCL within the Eurosystem

In accordance with the Treaty on European Union, the BCL is an integral part of the European System of Central Banks (ESCB), as are the NCBs of the other countries of the European Union (EU) and the ECB. The nominal capital of the ECB is held entirely by the NCBs of the Member States of the EU. As all the Member States of the EU have not yet introduced the euro, it is necessary to make a distinction between the ESCB and the Eurosystem. The latter includes the ECB and the NCBs of the countries which have adopted the euro (Austria, Belgium, Croatia, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Spain, Slovakia and Slovenia). The main objective of the Eurosystem and the ESCB is to maintain price stability and to achieve that end a single monetary policy is implemented.


The Eurosystem's decision-making body : the Governing Council

The Governing Council consists of the governors of the national central banks (NCBs) of the euro area countries and the six members of the ECB's Executive Board. The Executive Board consists of the President and Vice-president of the ECB and four other members, all appointed by the European Council (meeting of the European Union Heads of State or Government) by qualified majority, following a recommendation by the ECOFIN Council (meeting of the EU Member States’ finance ministers) and after consultation with the European Parliament and the Governing Council.

The Governing Council is responsible for adopting the guidelines and taking the decisions necessary to ensure the performance of the tasks entrusted to the Eurosystem. The Governing Council usually meets twice a month at the ECB headquarters in Frankfurt am Main, Germany. One meeting out of three is devoted to the assessment of economic and monetary developments and monetary policy decisions. At the other two meetings, the Governing Council mainly discusses issues related to other tasks and responsibilities of the Eurosystem. If necessary, the Governing Council can also meet and take decisions by means of teleconference.

Within the Governing Council, members participate in their personal capacity. They neither represent their country, nor their institution of origin. Decisions are usually taken by consensus.

Committees help prepare and implement the decisions taken by the Governing Council. They consist of experts from each central bank of the Eurosystem, or in certain cases, the ESCB. These committees meet several times a year and carry out the tasks defined by their mandate. Committees send the results of their work to the Governing Council via the Executive Board. 

The decentralisation principle

Pursuant to the principle of decentralisation, decisions taken by the Governing Council of the ECB are implemented in the countries of the euro area by each NCB. Hence, only the credit institutions established in Luxembourg can obtain financing from the BCL and only the BCL is competent to execute monetary policy operations in favour of the credit institutions established in Luxembourg.

The ECB must be consulted on any draft EU or national legislation in its fields of competence (monetary issues, monetary and financial statistical data collection, payment systems…). The NCBs participate directly in this consultation process and in the preparation of the ECB’s opinions.

Other ESCB Central Banks

The euro area national central banks (NCBs)

The national central banks (NCBs) outside the euro area

Interactive map of the euro area