Part VI Monetary Unions and other Forms of Monetary Organization, 27 The Institutional Framework of Monetary Union

Subject(s):

Eurozone — Monetary obligations — Institutional framework of monetary union — European Central Bank — European Banking Authority (EBA)

This chapter reviews the institutional framework of monetary union. As noted previously, the working definition of a monetary union is heavily dependent upon the need for a single central bank which issues the sole currency constituting legal tender within the territory of the union. Moreover, the crisis that has gripped the eurozone in recent times has focused attention on the institutional structures put in place to support the single currency. It thus remains appropriate to review the institutional arrangements for the performance of the central banking functions, the issue of the currency within the eurozone, and various other matters. The chapter begins by looking at the institutional history. It then considers the establishment, structure, and functions of the European Central Bank (ECB) and the European System of Central Banks (ESCB).