The Institutional Framework of the European System of Central Banks: Legal Issues in the Practice of the First Ten Years of its Existence

Abstract

In this contribution, some legal issues are described that have played a role in the in the first ten years of the European System of Central Banks’ existence. While the institutional framework established in Maastricht for the introduction of the euro and the functioning of the European System of Central Banks has proven to be legally sound and forms an appropriate basis for a successful monetary policy in the euro area, several legal issues have arisen that have been controversially discussed. The following issues are explored: (1) the legal status of the European System of Central Banks/ European Central Bank in the Community/ potential future Union framework, (2) the competences of the decision-making bodies of the European Central Bank, (3) the allocation of tasks and competences to national central banks and the European Central Bank in the context of the so-called principle of decentralization, (4) the new voting regime of the Governing Council of the European Central Bank entailing a rotation of voting rights of the national central banks’ Governors and (5) the allocation of monetary income. The article concludes with the expectation that issues sur-rounding the allocation of tasks and competences within the System and forms of cooperation between central banks will become more and more important, further, that legal issues will need to be resolved concerning the involvement of the European System of Central Banks in the future framework for financial supervision in the European Union.