What is the name of the central bank of the European Union that sets monetary policy for the eurozone?

The central bank of the European Union that sets monetary policy for the eurozone is the European Central Bank (ECB).

The ECB was established in 1998 and became responsible for euro-area monetary policy on January 1, 1999, when the euro was introduced for electronic and accounting purposes. It works with the national central banks of euro-area countries through the Eurosystem.

Its primary objective is price stability. The ECB’s Governing Council sets key interest rates and decides how monetary-policy tools should be used. Those decisions influence borrowing costs, saving returns, credit conditions, economic activity and inflation across the euro area.

A common mix-up is confusing the ECB with the European Commission or the European Parliament. Those are EU political institutions, while the ECB is an independent central bank. The ECB is also not the central bank of every EU member: countries that have not adopted the euro retain their own national monetary policies.