Organisation

Tasks of the national central banks

The operational set-up of the Eurosystem takes account of the principle of decentralisation. The national central banks (NCBs) perform almost all operational tasks of the Eurosystem. In doing so, they enact the decisions made centrally by the Governing Council of the ECB. 

The NCBs are responsible for

• Execution of monetary policy operations: this means that the NCBs carry out the actual transactions, such as providing the commercial banks with central bank money.
• Operational management of the ECB's foreign reserves: this includes the execution and the settlement of the market transactions necessary to invest the ECB's foreign reserves. 
• Management of their own foreign reserves: planned NCB operations in this area are subject to approval from the ECB, if such transactions could affect exchange rates or domestic liquidity conditions and if they exceed certain limits established by ECB guidelines. The aim is to ensure consistency with the monetary and exchange rate policy of the ECB.
• Operation and oversight of financial market infrastructures and payment instruments: NCBs act as the operators of the national component systems of TARGET2, the payment system for the euro, and its respective national user community is thus able to participate in TARGET2. Some NCBs also operate securities settlement systems. Furthermore, NCBs are involved in the oversight of financial market infrastructures.
• Joint issuance of banknotes together with the ECB: both the ECB and the NCBs are issuers of euro banknotes. All banknotes are put into circulation by the NCBs, which accommodate any demand for euro banknotes by launching annual banknote production orders and by operating a Eurosystem-wide stock management system. Both activities are coordinated by the ECB. NCBs take measures to achieve a high quality of banknotes in circulation and to analyse counterfeits. 
• Collection of statistics and providing assistance to the ECB: the ECB requires a wide range of economic and financial data to support the conduct of its monetary policy and the fulfilment of other Eurosystem tasks. The main areas where the NCBs help by collecting data from the national financial institutions are: i) money, banking and financial markets; ii) balance of payments statistics and on the Eurosystem's international reserves; and iii) financial accounts. 
• Functions outside the European System of Central Banks (ESCB): national central banks may also perform functions other than those specified in the Statute unless the Governing Council finds, by a majority of two-thirds of the votes cast, that these interfere with the objectives and tasks of the ESCB. Such functions are the responsibility of the national central banks.