Monetary policy preparation
The Governor of the Bank of Finland is a member of the main decision-making body of the Eurosystem, the Governing Council of the ECB. The Governing Council consists of the governors of the national central banks (NCBs) of the euro area and the six members of the ECB’s Executive Board. The Governing Council convenes in Frankfurt-am-Main, Germany, usually twice a month, and its most important task is to decide on the monetary policy of the euro area.
The Executive Board of the ECB consists of the President of the ECB (who acts as chairman), the Vice-President and four other members. The Board is responsible for managing the day-to-day business of the ECB according to the guidelines laid down by the Governing Council. It administers the ECB’s operations in Frankfurt and makes preparations and recommendations for the Governing Council meetings.
The General Council of the ECB handles general questions concerning all the EU Member States. The General Council comprises the governors of all EU Member States’ NCBs and the President and Vice-President of the ECB. The General Council usually convenes four times a year. It participates in the performance and coordination of the advisory functions of the ECB and in preparations for the enlargement of the euro area, although it is not involved in the decision-making processes of the Eurosystem.
Preparation of decisions
The preparatory work for decision-making within the Eurosystem and the ESCB is made both at individual central bank level and in a number of committees made up of experts from each of the ESCB member national central banks. Issues concerning the euro area are handled solely by representatives of the Eurosystem.
Key committees are the Monetary Policy Committee that assists in analyses and reports made to support monetary policy decision-making, and the Market Operations Committee that prepares the implementation of monetary policy decisions on the markets. The Risk Management Committee, which was established after the financial crisis, supports the Eurosystem in the management of risks relating to market operations.
Each of the committees is specialised in some particular area of activities key to central bank operations. Many of the committees also have either permanent or temporary working groups. The committees prepare issues that form the basis of the Executive Board’s recommendations to the Governing Council or the General Council. Thus, the Bank of Finland is in a position to influence the decision-making of the ESCB at a preparatory level, via the committees and working groups.