The European Central Bank

Definition

The ECB manages euro – Europe’s single currency – conducts monetary policy, and works to maintain price stability in the euro area.

Analogy

The ECB is like a financial doctor for the Eurozone. It checks the economic health of the countries using the euro, prescribes monetary policies as medicine, and tries to keep everything stable just like how a doctor would work to keep your body healthy.

Related terms

Eurozone: This refers to 19 of 27 EU member states that have adopted euro as their official currency.

Monetary Policy: The process by which central bank (like ECB) controls supply of money, often targeting inflation or interest rate to ensure price stability and general trust in currency.

Inflation: A general increase in prices and fall in purchasing value of money.