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The European Central Bank (ECB) is the central bank of the euro area. Our key objective is to maintain stable prices, and we do this primarily by setting appropriate interest rates.

We are also responsible for supervising banks within the framework of the Single Supervisory Mechanism (SSM).

Our actions are guided by the principles of transparency, independence and accountability.

There are currently 24 official EU languages, and you can communicate with us in any of these. The languages we use to communicate depend on the target audience and the specific circumstances. The ECB publishes legal acts in all official EU languages, and its working language is English.

Together, the national central banks of all EU countries own the ECB. Each country’s share of the ECB’s capital reflects its population and gross domestic product (GDP), which have equal weighting. In addition, EU countries that use the euro pay in more capital than those that don’t. These factors combined are the basis for what is called the capital key, which determines the amount paid by each national central bank.

The ECB makes profits and incurs losses, just like other institutions. The net profits and losses of the ECB are shared among the national central banks of the euro area. The Statute of the European System of Central Banks (ESCB) and of the ECB states that up to 20% of any profits may be kept as reserves, while the remaining profits must be distributed to the shareholders of the ECB (i.e. the national central banks of the euro area) in proportion to their paid-up shares. Any losses can be offset against the ECB’s general reserves, its income for the year or the amounts allocated to each national central bank.

The ECB’s monetary policy encompasses all measures to influence the cost of borrowing that can be taken to meet our price stability objective. Our primary monetary policy instrument is the set of key ECB interest rates. Any change in these rates affects other interest rates across the whole euro area economy, including the rates at which commercial banks lend money to individuals and companies. These rate changes affect the demand for goods and services, which has an impact on inflation – with a time lag. If necessary, we can also use other tools to help us achieve our primary objective of price stability.

Price stability is the ECB’s primary objective, as set out in Article 127 of the Treaty on the Functioning of the European Union. The ECB considers that price stability can best be maintained by aiming for 2% inflation, as measured by the Harmonised Index of Consumer Prices (HICP), over the medium term.

Stable prices encourage companies to invest and make it easier for people to plan their spending. They also help to maintain confidence in the euro by ensuring the quantity of goods and services that can be purchased with a given amount of euro remains constant.

To maintain price stability effectively, we need a reliable measure of inflation. For this, we look at the prices of hundreds of items that people typically spend their money on, including goods (such as food, clothes and energy) and services (such as mobile phone plans, train tickets and rented housing). Together, these costs give us an idea of how much prices are changing in the economy overall.

This bigger picture is provided by the Harmonised Index of Consumer Prices (HICP), which we consider to be the most appropriate measure for consumer price inflation, that is to say changes in the prices of consumer goods and services purchased by euro area households.

It is a “harmonised” index because all EU countries use the same methodology. This ensures that data for one country can be compared with data for another. 

The HICP is compiled by Eurostat and national statistical institutes applying harmonised statistical methods.

Now that inflation is closer to our goal of 2%, we have reduced our interest rates, but will maintain them at levels that ensure that inflation returns to target and stays there. This is crucial because high inflation makes life difficult for people and businesses.

As the central bank for the euro, our mandate is to keep prices stable. When prices are rising too fast – i.e. when inflation is too high – increasing the key ECB interest rates helps us bring inflation back to our target level of 2% over the medium term. We therefore began raising interest rates in July 2022, and continued to do so until September 2023, to bring down inflation. Prices are no longer going up as strongly, which is why we have started to gradually reduce our interest rates – but we are not yet at our target level.

The aim of European banking supervision is to ensure the European banking system is safe and sound, to increase financial integration and stability, and to ensure consistent supervision.

The Single Supervisory Mechanism (SSM) is the system of banking supervision in Europe. It comprises the supervisory arm of the ECB (ECB Banking Supervision) and the national supervisory authorities of the countries participating in the SSM.

We encourage you to report any suspected breaches by supervised banks, national banking supervisors or the ECB itself of EU law relating to the prudential supervision of banks via our whistleblowing platform. The ECB ensures appropriate protection for both those who report breaches and those who are accused of them, as well as of all personal data involved.

We think that it’s vital for information to be accessible. We aim to be as transparent as possible, while at the same time ensuring confidentiality in matters relating to how we perform our tasks.

We would advise you to first consult the website of the bank you are interested in, given that banks usually disclose certain information in their annual, quarterly or other accountability reports.

Confidential information on individual supervised banks is specifically protected by professional secrecy requirements, as outlined in European law (e.g. the Capital Requirements Directive). Nevertheless, the ECB is committed to communicating openly whenever possible. In addition to publishing press releases, speeches, interviews and publications, the ECB provides access to its Public Register of Documents. Detailed rules are laid down for public access to ECB documents (see ECB Decision ECB/2004/3 of 4 March 2004).

Banks supervised directly by the ECB are called significant institutions, while those supervised indirectly are called less significant institutions.

Supervisors assess the risks faced by banks and check that banks are equipped to manage those risks properly. This is called the Supervisory Review and Evaluation Process (SREP), and its purpose is to ensure that banks’ risk profiles are assessed in a consistent manner so that decisions can be taken on any supervisory measures that may be necessary.

Supervisors use stress tests to see how well banks can cope with financial and economic shocks. The results of stress tests help supervisors to identify banks’ vulnerabilities and address them at an early stage as part of their supervisory dialogue.

Incidents during the COVID-19 pandemic and following the Russian invasion of Ukraine have reinforced the importance of protecting critical services from cyberattacks and outages. To make the EU’s financial sector stronger and more digitally resilient, the ECB examines banks’ exposures to IT risks and assesses their risk management capabilities. This is done through the ECB’s cyber incident reporting framework and by reviewing banks’ responses to an annual IT risk questionnaire. The ECB conducted a thematic stress test on cyber resilience in 2024, which tested how banks respond to and recover from a successful cyberattack.

The ECB can impose sanctions, i.e. monetary penalties, on banks it supervises directly (so-called significant banks) that breach directly applicable EU law or ECB decisions or regulations. If national legislation implementing EU directives is infringed, breaches are committed by natural persons or a non-monetary penalty has to be imposed, the ECB may ask the relevant national supervisory authority (the national competent authority or NCA) to conduct the relevant proceedings. The NCA can then decide the appropriate penalties in accordance with the applicable national legislation.

Penalties imposed by the ECB in its supervisory role are published on the ECB’s website.

The creation of the euro was an impressive achievement in bringing the people of Europe together by allowing them to travel, study and work abroad much more easily and with greater financial certainty. The Treaty of Maastricht was one of the most important milestones for European integration and paved the way for the creation of a common currency.

The ECB is exploring the possibility of introducing a digital euro. This would be an electronic form of money issued by the Eurosystem. It would be central bank money and therefore risk-free. Currently, cash is the only central bank money used for retail payments. The digital euro would be an additional way of making payments in euro, not replacing cash but rather complementing it. It would be convertible (on a one-to-one basis) with all other forms of euro, such as banknotes.

The digital euro would combine the efficiency of a digital payment instrument with the safety of central bank money. It would help the EU remain independent of digital payment methods issued and controlled from outside the euro area. It would also secure financial stability and monetary sovereignty, and help maintain trust in payments in the digital age.

Crypto-assets are fundamentally different from central bank money: their prices are extremely volatile, which makes them hard to use as a means of payment or a unit of account. Crypto-assets have no intrinsic value and no public institution backing them. There are similar concerns about stablecoins: their reliability ultimately depends on the issuing entity and the underlying assets. They are also dependent on the issuer keeping the value of the coins stable over time. A digital euro, on the other hand, would be central bank money. This means that it would be issued by a central bank and would be designed to meet the needs of citizens: as well as respecting privacy, it would also be risk-free.

Experts from the Eurosystem have established a number of basic requirements to help us see what the digital euro might look like. These include accessibility, robustness, efficiency, data security and privacy, and compliance with the law. The digital euro would be designed to be compatible with existing payment services, facilitating the provision of pan-European payments and other services to users.

The Eurosystem has no interest in collecting payment data from individual users, tracing payment behaviour or sharing such data with government agencies or other public institutions.

Users will likely have to identify themselves when first accessing digital euro services, but high levels of privacy can still be guaranteed for their payments.

Euro banknotes are a tangible, visible symbol of European unity. As part of the regular banknote development process, and 20 years on from the introduction of the first euro, it is time to revisit the design of euro banknotes.

In December 2021 the ECB began examining ideas for a new banknote theme as an initial step towards redesigning euro banknotes to make them more relatable to Europeans, while also ensuring that the new notes and their security features incorporate the best, most sustainable technology available.

The redesign process consists of two consecutive phases: selecting a new theme and developing new designs. The public is involved throughout the process, with surveys being conducted by both the ECB and a separate research company.

It is currently anticipated that the ECB Governing Council will decide on the new designs for euro banknotes in 2026.

€500 banknotes are no longer being issued. They do, however, continue to be legal tender, so can still be used as a means of payment and a store of value. Like all denominations of euro banknotes, the €500 note will always retain its value and can be exchanged at any national central bank in the euro area at any time.

Images of euro banknotes can be used for non-professional purposes without our prior authorisation, provided you comply with all existing rules to ensure that the reproduction is never confused with a genuine banknote (see Article 2 of Decision ECB/2013/10) given that this would undermine trust in the euro.

If you wish to use high-resolution images of euro banknotes for professional purposes, you must contact us at euro-banknotes-images@ecb.europa.eu so that we can assess your case. If your request is approved, you will be sent the relevant electronic images.

Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) Services are a number of services developed and operated by the Eurosystem which ensure the free flow of cash, securities and collateral across Europe.

These financial market infrastructure services include the T2 system (for settling large-value payments by central banks and commercial banks), the TARGET2-Securities (T2S) platform (for settling securities), the TARGET Instant Payment System (TIPS) (for retail instant payments) and the Eurosystem Collateral Management System (ECMS) (for collateral management). All of these services settle in central bank money.

Please note that the ECB and the national central banks cannot provide information on the status of individual bank transfers, whether within the euro area or internationally.

The TARGET Instant Payment System (TIPS) is a Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) service launched by the ECB and the national central banks in 2018. It enables payment service providers to offer real-time fund transfers to their customers around the clock. Thanks to TIPS, instant payments can now be made quickly and safely.

What is our cash strategy? Why is cash important? How do people in the euro area like to pay?

Why are payment systems so important?

We have a strong interest in addressing climate risks to areas falling within our mandate. Climate change matters to us because it weighs on the economy, which in turn affects our goal of keeping prices stable. It also has an impact on how we supervise banks and how we manage our own exposure to climate risks.

We regularly publish information on how the ECB is approaching the issue of climate change on our websites: