A look inside two central banks: the European Central Bank and the Federal Reserve

Abstract

In 1998 the European Central Bank (ECB) became the world’s 173rd central bank. The Eurosystem, with its structure of national central banks and the ECB, is similar to the Federal Reserve System, with its District Banks and Board of Governors. However, important differences exist in the way the two systems operate. This article compares the organization and tasks of the two central banks by examining differences in their monetary policy frameworks, specifically focusing on the goals, tools, and policymaking process. In addition it examines the independence, accountability, and transparency of these central banks.European Central Bank ; Federal Reserve System ; Monetary policy