The Role of the Central Bank in Foreign Exchange Inspection in Selected Countries of the European Union – as seen in the Example of Poland, the Czech Republic and Germany

Ewa Kowalewska

doi:10.31743/recl.12282

Abstract

The activity of central banks in EU states is based on similar assumptions. Their aim is usually to maintain a stable level of prices and to support the state’s economic policy. Central banks are responsible for issuing money and for monetary policy. They have been equipped with adequate instruments to this end. The aim of this research is to demonstrate that legislation in Poland, the Czech Republic and Germany vested another important function in the central banks, namely foreign exchange inspection. However, this function is exercised differently in each of them. The central banks of countries referred to above are not only responsible for currency in circulation within the country but also for the balance of payments. Also, by pursuing their own foreign exchange policy they ensure an adequate position of the national currency in relation to foreign ones. The foreign exchange inspection in each of these countries is based on a different tradition and at the same time outlines the special role of the central bank. The analysis herein makes it possible to establish the scope of this inspection, taking into account the dynamics of changes that occur on the legal ground. What is also important here is whether a given country is only a member of the European Union or a member of the EU and of the euro area. The adopted research methodology is based on analysis of legislation in force with a reference to views expressed by legal commentators.

Highlights

The history of central banking in Europe dates back to the turn of the seventieth and eighteenth century and the Bank of England can be treated as its prototype
The above discussion presents an analysis of legal instruments of an important issue within the competence of the central bank, namely foreign exchange inspection
The limits of research are specified by regulations addressing the central bank, foreign exchange inspection and the functioning of supervision, in each of the three analyzed domestic legislations

Summary

INTRODUCTION

The history of central banking in Europe dates back to the turn of the seventieth and eighteenth century and the Bank of England can be treated as its prototype. Taking into account the comparative aspect one needs to point to two categories of central banks in European Union (EU) states. These are central banks of countries which belong to the Euro zone and central banks of countries outside the euro area. On the basis of regulations legally binding in EU countries one may notice that in each of them the central bank has a special place, both in the economic and social system. This specific nature of the central bank results primarily from its monopoly in creating money[2]. THE ROLE OF THE CENTRAL BANK IN FOREIGN EXCHANGE INSPECTION IN SELECTED COUNTRIES central banking foreign exchange institution tasked with foreign exchange inspection

SCOPE OF RESEARCH AND METHODOLOGY

CENTRAL BANKING AND FOREIGN EXCHANGE INSPECTION IN POLAND

CENTRAL BANKING AND FOREIGN EXCHANGE INSPECTION IN THE CZECH REPUBLIC

CONCLUSIONS