European Central Bank

Knowledge Identifier: &European_Central_Bank

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European Central Bank

Central bank for the euro and administers the monetary policy of the 17 EU member states which constitute the Eurozone, one of the largest currency areas in the world add

Category: Economy (2)

Founded in 1998.

Countries: Europe (16%), (15%), United States (14%)

Main connections: Eurozone crisis, European Union, Deutsche Bundesbank

Linked to: Eurozone, De Nederlandsche Bank, Banque de France, Central Bank of Cyprus

 

Timeline


 

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1998

The bank was established by the Treaty of Amsterdam in 1998, and is headquartered in Frankfurt, Germany add something

 

The initial capital allocation key was determined in 1998 on the basis of the states' population and GDP, but the key is adjustable add something

 

The ECB formally replaced the EMI on 1 June 1998 by virtue of the Treaty on European Union , however it did not exercise its full powers until the introduction of the euro on 1 January 1999, signalling the third stage of EMU. The bank was the final institution needed for EMU, as outlined by the EMU reports of Pierre Werner and President Jacques Delors add something

 

Banque de France - On 1 June 1998, a new institution was created, the European Central Bank , charged with steering the single monetary policy for the euro

 

Eurozone - The ECB announced on 22 December 1998 that, between 4 and 21 January 1999, there would be a narrow corridor of 50 base points interest rates for the marginal lending facility and the deposit facility in order to help the transition to the ECB's interest regime


1999

In 1999 an international architectural competition was launched by the bank to design a new building add something

 

Eurozone - Interest rates for the eurozone, set by the ECB since 1999


2000

On 22 September 2000, the ECB, together with the monetary authorities of the US, Japan, the UK and Canada, initiated concerted intervention in the foreign exchange markets; the ECB intervened again in early November 2000 add something


2001

Since then, Greece joined in January 2001, Slovenia in January 2007, Cyprus and Malta in January 2008, Slovakia in January 2009, and Estonia in January 2011, enlarging the bank's scope and the membership of its Governing Council add something


2002

Vitor Constancio - Constâncio was first mentioned as a potential vice president of the European Central Bank in 2002, to replace Christian Noyer


2003

Guy Quaden - He was Governor of the National Bank of Belgium 2003-11, and as such a member of the Governing and General Councils of the European Central Bank

 

The Governing Council confirmed this definition in May 2003 following a thorough evaluation of the ECB's monetary policy strategy add something

 

Marcia De Wachter - On 4 August 2003, she became Honorary Vice-Governor of the NBB. In 2003 she was Belgium's candidate for a place on the board of the European Central Bank, but was not selected

 

Jean-Claude Trichet - On 1 November 2003 he took Wim Duisenberg's place as president of the European Central Bank


2004

Axel A. Weber - He was president of the Deutsche Bundesbank and a member of the European Central Bank Governing Council from 30 April 2004 to 30 April 2011

 

Axel A. Weber - Weber was appointed President of the Deutsche Bundesbank and a member of the Governing Council of the European Central Bank on 30 April 2004

 

José Manuel González-Páramo, a Spanish member of the Executive Board since June 2004, was due to leave the board in early June 2012 and no replacement had been named as of late May 2012 add something

 

Spahn tax - In November 2004, Belgium submitted this law for an opinion to the European Central Bank


2005

Think-tanks such as the World Pensions Council have argued that European legislators have pushed somewhat dogmatically for the adoption of the Basel II recommendations, adopted in 2005, transposed in European Union law through the Capital Requirements Directive , effective since 2008 add something


2007

In December 2007, the ECB decided in conjunction with the Federal Reserve under a program called Term auction facility to improve dollar liquidity in the eurozone and to stabilise the money market add something

 

Federal Reserve System - The creation of this facility was announced by the Federal Reserve on December 12, 2007, and was done in conjunction with the Bank of Canada, the Bank of England, the European Central Bank, and the Swiss National Bank to address elevated pressures in short-term funding markets


2008

Such a move is similar to what the US federal reserve did in buying subprime mortgages in the crisis of 2008, except in the European crisis, the purchases are of member state debt add something

 

The economic and financial crisis that began in 2008 has revealed some relative weaknesses in the sovereign debt of such member countries as Portugal, Ireland, Greece and Spain add something

 

Goldman Sachs - Former Goldman executives include Robert Rubin and Henry Paulson who served as United States Secretary of the Treasury under Presidents Bill Clinton and George W. Bush, respectively, as well as Mark Carney, the governor of the Bank of Canada since 2008, Mario Draghi, governor of the European Central Bank

 

European Union - One of the outgrowths of the European sovereign debt crisis of 2008 on and strains on the Euro have been, first, increased reliance on the European Central Bank and the IMF for managing intra-Union financial imbalances; second, a move toward European common banking regulation; and third, proposals for greater common political and budgetary policy for the Union

 

Central Bank of Cyprus - He or she had the responsibility for setting the Central Bank's policy in relation to the Cypriot economy, but this responsibility passed to the President of the European Central Bank on 1 January 2008, which is the date that Cyprus changed over to the Euro from the Cypriot pound

 

The ECB's first supplementary longer-term refinancing operation with a six-month maturity was announced March 2008 add something

 

Eurozone crisis - The ECB's first supplementary longer-term refinancing operation with a six-month maturity was announced March 2008

 

The main construction began in October 2008, with completion scheduled during 2014 add something


2009

From late 2009, fears of a sovereign debt crisis developed among fiscally conservative investors concerning some European states, with the situation becoming particularly tense in early 2010 add something

 

On 1 December 2009, the Treaty of Lisbon entered into force, ECB according to the article 13 of TEU, gained official status of an EU institution add something


2010

Greek government-debt crisis - On 3 May 2010, the European Central Bank suspended its minimum threshold for Greek debt "until further notice", meaning the bonds will remain eligible as collateral even with junk status

 

On 9 May 2010, the 27 member states of the European Union agreed to incorporate the European Financial Stability Facility add something

 

On 9 May 2010, the 27 member states of the European Union agreed to incorporate the European financial stability facility add something

 

Banco Portugues de Negocios - In December 2010, Constâncio was appointed vice president of the European Central Bank, for an eight-year mandate, being responsible for banking supervision

 

On 17 December 2010, the ECB announced that it was going to double its capitalisation add something


2011

In 2011, when German appointee to the Governing Council and Executive board, Jürgen Stark, resigned in protest of the ECB's bond buying programme, Financial Times Deutschland called it "the end of the ECB as we know it" referring to its perceived "hawkish" stance on inflation and its historical Bundesbank influence add something

 

The ECB always could, and through the late summer of 2011 did, purchase bonds issued by the weaker states even though it assumes, in doing so, the risk of a deteriorating balance sheet add something

 

All National Central Banks that own a share of the ECB capital stock as of 1 January 2011 are listed below add something

 

Brian Lenihan, Jnr - In an April 2011 interview Lenihan claimed the European Central Bank forced Ireland into taking a bailout and rejected claims by a senior ECB figure that the bank warned Ireland in mid-2010 of the dangers it faced

 

Eurozone crisis - In September 2011, Jürgen Stark became the second German after Axel A. Weber to resign from the ECB Governing Council in 2011

 

Mario Draghi - Draghi was frequently mentioned as a potential successor to Jean-Claude Trichet, whose term as President of the European Central Bank ended in October 2011

 

Occupy movement - On 15 October 2011, about 200,000 people gathered in Rome to protest against economic inequality and the influence of the European Commission, the European Central Bank and the International Monetary Fund on government

 

Eurozone crisis - On 30 November 2011, the ECB, the US Federal Reserve, the central banks of Canada, Japan, Britain and the Swiss National Bank provided global financial markets with additional liquidity to ward off the debt crisis and to support the real economy

 

Maria Joao Rodrigues - In December 2011, she has been arguing for the use of a "big bazooka" to address the eurozone crisis, in the form of a large scale government debt purchase by the European Central Bank

 

The programme was announced on 8 December 2011 but observers were surprised by the volume of the loans made when it was implemented add something

 

This can be compared with the 523 banks that took part in the first auction on 21 December 2011 add something

 

Eurozone crisis - On 22 December 2011, the ECB started the biggest infusion of credit into the European banking system in the euro's 13-year history


2012

Digital currency - A virtual currency has been defined in 2012 by the European Central Bank as "a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community"

 

Banco Bilbao Vizcaya Argentaria - February 24, 2012 – Banco Bilbao Vizcaya Argentaria SA , CaixaBank SA and Banca Civica SA were among a slew of Spanish banks that participated in the European Central Bank's long-term refinancing operations, the lenders said Wednesday

 

Virtual currency - In 2012, the European Central Bank defined "'virtual currency"' as a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community

 

Greek government-debt crisis - The vote is now expected to pave the way for the EU, ECB and IMF to jointly release the funds, which are supposed to cover all the Greek financial needs in 2012-2014

 

Olli Rehn - In May 2012, coincident with warnings from Mario Draghi of the ECB, Rehn said that even if Eurobonds "were ever approved, it would still not be sufficient to save the euro

 

European Union financial transaction tax - In May 2012, member of the executive board of the European Central Bank Jörg Asmussen spoke out in favour of an EU FTT, citing additional revenues and justice to be the main reasons

 

Economy of Cyprus - In June 2012 the Cypriot finance minister Vassos Shiarly stated that the European Central Bank, &European_commission and IMF officials are to carry out an in-depth investigation into Cyprus' economy and banking sector to assess the level of funding it requires

 

Eurozone crisis - On 16 June 2012 the European Central Bank together with other European leaders hammered out plans for the ECB to become a bank regulator and to form a deposit insurance program to augment national programs

 

On 6 September 2012, the ECB announced a new plan for buying bonds from eurozone countries add something

 

European Stability Mechanism - In order to further help increase the financial stability of the eurozone, the ECB decided on 6 September 2012 to automatically run a free unlimited amount of yield-lowering bond purchases for all eurozone countries involved in a sovereign state bailout or precautionary programme from EFSF/ESM, if -and for as long as- the country is found to suffer from stressed bond yields at excessive levels; but only at the point of time where the country possesses/regain a complete market funding access -and only if the country still complies with all terms in the signed MoU-agree

 

Eurozone crisis - On 6 September 2012, the ECB announced to offer additional financial support in the form of some yield-lowering bond purchases , for all eurozone countries involved in a sovereign state bailout program from EFSF/ESM

 

Eurozone crisis - On 6 September 2012, the ECB calmed financial markets by announcing free unlimited support for all eurozone countries involved in a sovereign state bailout/precautionary programme from EFSF/ESM, through some yield lowering Outright Monetary Transactions

 

On 31 October 2012, ECB announced it has phased out one of the crisis measures aimed at supporting the shaky banking system of the 17-country eurozone add something

 

Yves Mersch - He has been a member of the European Central Bank's Executive Board, succeeding José Manuel González Paramo, since December 2012

 

Lucinda Creighton - She publicly called for the European Central Bank to become a lender of last resort following a meeting with her French counterpart in Paris in December 2012


2013

Michael Noonan - In February 2013, a deal was reached with the European Central Bank in relation to the promissory note used to bail out the former Anglo Irish Bank

 

Enda Kenny - In February 2013, a deal was reached with the European Central Bank in relation to the promissory note used to bail out the former Anglo Irish Bank


2014

Interest rate - Both the European Central Bank starting in 2014 and the Bank of Japan starting in early 2016 pursued the policy on top of their earlier and continuing quantitative easing policies

 

Frankfurt - The future European Central Bank Headquarters in the Ostend district, consisting of the former wholesale market hall and a newly built 185-metres skyscraper, are expected to be completed by early 2014

 

Greek government-debt crisis - By July 2014 there was still anger and protests about the austerity measures, with a 24-hour strike among government workers on 9 July 2014, timed to coincide with an audit by inspectors from the International Monetary Fund, the European Union and European Central Bank

 

On 4 September 2014, the bank went further by announcing it would buy bonds and other debt instruments primarily from banks in a bid to boost the availability of credit for businesses add something

 

In November 2014, the bank moved into its new headquarters add something

 

Central Bank of Ireland - On 4 November 2014 the European Central Bank formally took over supervisory powers from the CBOI in regulating the biggest banks in the Irish financial system


2015

All National Central Banks that own a share of the ECB capital stock as of 1 January 2015 are listed below add something

 

Luc Coene - In March 2015 he became a member of the Supervisory Board of the Single Supervisory Mechanism, the ECB's banking supervision mechanism directly supervising large banks

 

Luc Coene - In March 2015 he was appointed Member of the Supervisory Board of the ECB for a period of 5 years

 

On March 9, 2015 the ECB started it's quantitative easing program add something

 

Quantitative easing - On March 27, 2015, 19 economists including Steve Keen, David Graeber, Ann Pettifor, Robert Skidelsky, and Guy Standing have signed a letter to the Financial Times calling on the European Central Bank to adopt a more direct approach to its quantitative easing plan announced earlier in February

 

Greek government-debt crisis - In the event Greece manage to negotiate a new bailout-deal with the Troika ahead of June 2015, it will benefit not only from the direct release of bailout funds to the state, but indirectly from a re-opened access for its financial sector to much cheaper liquidity from ECB - while at the same time becoming part and benefiting from the Quantitative Easing bond buying program operated by ECB, which has the prospect to lower yields and help build the ground for increased economic growth

 

Alexis Tsipras - On 27 June 2015 Tsipras announced a referendum to decide whether or not Greece should accept the bailout conditions proposed jointly by the Juncker Commission, the International Monetary Fund and the European Central Bank


2016

Veneto Banca - However, after a heavy loan write-down in 2016 financial year, as well as a scandal on selling own new shares to depositors in the past, European Central Bank announced the bank was insolvent on 23 June 2017, and would be broken up into a good and a bad bank

 

Euro - On Wednesday, February 24, 2016, as part of the Bundesbank's annual news conference, Bundesbank president and European_Central_Bank Governing Council member, Jens Weidmann, dismissed deflation in light of the ECB's current stimulus program, pointing out the healthy condition of the German economy and that the euro area isn't that bad off, on the eve of the March 9-10, 2016 meetings add something

 

Jens Weidmann - On 24 February 2016, as part of the Bundesbank's annual news conference, Bundesbank president and European Central Bank Governing Council member, Jens Weidmann, dismissed deflation in light of the ECB's current stimulus program, pointing out the healthy condition of the German economy and that the euro area is not that bad off, on the eve of the 9-10 March 2016 meetings

 

Deutsche Bundesbank - On Wednesday, February 24, 2016, as part of the Bundesbank's annual news conference, Bundesbank president and European Central Bank Governing Council member, Jens Weidmann, dismissed deflation in light of the ECB's current stimulus program, pointing out the healthy condition of the German economy and that the euro area isn't that bad off, on the eve of the March 9-10, 2016 meetings

 

The program is expected to last until at least September 2016 add something


2017

Mario Draghi - Giacomo worked as an interest-rate derivative trader at investment bank Morgan Stanley until 2017, a time overlapping with Draghi's presidency of the ECB.

 

Eurozone crisis - In 2017 the idea was picked up by the European Central Bank

 

Luis de Guindos - In 2017, de Guindos was widely seen as a natural successor to replace Jeroen Dijsselbloem as next chairman of the Eurogroup but he ruled himself out early in favour of an expected candidacy to become Vice-President of the European Central Bank

 

Veneto Banca - On 23 June 2017, the European Central Bank and the Single Resolution Board determined Veneto Banca and sister bank BPVi were insolvent, but not yet fulfilled the criteria to put the bank in resolution by the board


2018

The program is expected to last until at least end of 2018 add something

 

Ministry of Economy and Finance (Spain) - In 2018, De Guindos left the government to become Vice President of the ECB and Prime Minister Rajoy appointed Román Escolano as new Minister of Economy


2019

Erkki Liikanen - In early 2019, a "Reuters" poll of economists found that while Benoît C?uré was considered best-suited for the role as President of the European Central Bank, the most likely compromise candidate was Liikanen