European Central Bank

The European Central Bank (ECB) is the central bank for the euro and administers monetary policy of the Eurozone, which consists of 19 EU member states and is one of the largest currency areas in the world. It is one of the world's most important central banks and is one of the seven institutions of the European Union (EU) listed in the Treaty on European Union (TEU). The capital stock of the bank is owned by the central banks of all 28 EU member states. The Treaty of Amsterdam established the bank in 1998, and it is headquartered in Frankfurt, Germany. As of 2015 the President of the ECB is Mario Draghi, former governor of the Bank of Italy, former member of the World Bank, and former managing director of the Goldman Sachs international division (2002–2005). The bank primarily occupied the Eurotower prior to, and during, the construction of the new headquarters.

The primary objective of the European Central Bank, as mandated in Article 2 of the Statute of the ECB, is to maintain price stability within the Eurozone. The basic tasks, as defined in Article 3 of the Statute, are to define and implement the monetary policy for the Eurozone, to conduct foreign exchange operations, to take care of the foreign reserves of the European System of Central Banks and operation of the financial market infrastructure under the TARGET2 payments system and the technical platform (currently being developed) for settlement of securities in Europe (TARGET2 Securities). The ECB has, under Article 16 of its Statute, the exclusive right to authorise the issuance of euro banknotes. Member states can issue euro coins, but the amount must be authorised by the ECB beforehand (upon the introduction of the euro, the ECB also had exclusive right to issue coins).

Central bank

A central bank, reserve bank, or monetary authority is an institution that manages a state's currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in the state, and usually also prints the national currency, which usually serves as the state's legal tender.

The primary function of a central bank is to control the nation's money supply (monetary policy), through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis. Central banks usually also have supervisory powers, intended to prevent bank runs and to reduce the risk that commercial banks and other financial institutions engage in reckless or fraudulent behavior. Central banks in most developed nations are institutionally designed to be independent from political interference. Still, limited control by the executive and legislative bodies usually exists.

Central Bank of the Republic of Turkey

The Central Bank of the Republic of Turkey, CBRT (Turkish: Türkiye Cumhuriyet Merkez Bankası, TCMB) is the central bank of Turkey and is founded as a joint stock company on 11 June 1930.

Shares of the CBRT are divided into four classes. Class A shares belong solely to the Turkish Treasury. Class B and Class C shares are allocated to national banks operating in Turkey, banks other than national banks and privileged companies. Finally, Class D shares are allocated to Turkish commercial institutions and to real and legal persons of Turkish nationality.

The CBRT determines, at its own discretion, the monetary policy to pursue and the policy instruments to use in achieving price stability in Turkey. This implies that the CBRT enjoys instrument independence. In order to attain its objective of price stability, the CBRT has implemented a full-fledged inflation targeting regime since 2006.

The preparations to establish a central bank of Turkey began in 1926, but the organization was established on 3 October 1931 and opened officially on 1 January 1932. The Bank had, originally, a privilege of issuing banknotes for a period of 30 years. In 1955, this privilege was extended until 1999. Finally it was prolonged indefinitely in 1994.