European System of Central Banks, ESCB
The ESCB consists of the European Central Bank (ECB), which is located in Frankfurt, and the national central banks of all of the EU Member States (see EU cooperation in Brussels).
The Eurosystem consists of the ECB and the national central banks of the countries that have adopted the euro.
Activities within the ESCB and the Eurosystem are regulated by the Treaty on European Union and a special charter appended to the treaty. The most far-reaching provisions of the charter apply to the central banks in the Eurosystem, which conduct a single monetary policy, hold a joint foreign reserve, are responsible for supplying cash in the single currency, etc. Decisions in these fields are made at a central level, while the execution of the decisions is largely decentralised to the national central banks within the Eurosystem.
The main objective of the Eurosystem is to maintain price stability. Without prejudice to this primary objective, the Eurosystem shall support the general economic policies in the Community with a view to contributing to the achievement of the objectives of the Community (see the mandate for EU cooperation in Brussels).
The central banks that are members of the ESCB but not of the Eurosystem - which include the Riksbank - retain responsibility for conducting an independent national monetary policy and so on. For these countries, participation in the ESCB entails cooperation that will enable entry to the Eurosystem at a later stage.
The ESCB was established on 1 June 1998 and the Eurosystem came into operation on 1 January 1999 with the start of Stage Three of Economic and Monetary Union in Europe. Preparations for its activities had been made by the national central banks within the European Monetary Institute (EMI) since 1994.