Monetary Policies By The European Central Bank And The Federal Reserve System

Seminar paper from the year 2011 in the subject Economics - Monetary theory and policy, grade: 1,7, The FOM University of Applied Sciences, Hamburg, course: Advanced Business English, language: English, abstract: Since the European Monetary Union was established in 1999 the worlds political attention has been drawn to two main central banks: the European System of Central Banks and the Federal Reserve System. The legal basis of the European System of Central Banks is the Treaty establishing the European Community and the Statute of the European System of Central Banks and of the European Central Bank. Since it's estblishments the European Central Bank has played a central role in both European and global financial markets. The Federal Reserve System was signed into law by the Federal Reserve Act in 1913. Although the Federal Reserve System was established long before the European System of Central Bank there are several similarities in the ways the central banks operate and control the monetay policy of their nations. But the central banks also differ in certain ways. Whereas the Federal Reserve System was established in order to rearrange the financial system of the United States, the European System of Central Banks started business in order to create a single monetary policy. The following chapters will give a closer look into both systems and their monetary policies.