European Central Bank (ECB) definition

The European Central Bank (ECB) is the central bank for countries that use the euro (the eurozone).

Home Investing glossary European Central Bank (ECB)

What is the European Central Bank?

The European Central Bank (ECB) is the central bank for countries that use the euro (the eurozone). It’s responsible for keeping prices stable and managing the eurozone economy.

 

What does the European Central Bank do?

Its main jobs include:

  • Setting interest rates: raising them to control inflation or lowering them to boost economic growth.
  • Managing inflation: the ECB aims to keep inflation around 2%.
  • Overseeing banks: making sure European banks are financially stable.

When the ECB makes a big decision – like changing interest rates – it can affect borrowing costs, stock markets, and even the value of the euro.

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