Which institution, established in 1998, is responsible for monetary policy for the euro area?

The European Central Bank is the institution responsible for monetary policy for the euro area, established in 1998.

The ECB was created under the European Union’s preparations for Economic and Monetary Union. It is headquartered in Frankfurt, Germany, and works with the national central banks of euro-area countries through the Eurosystem.

Its core mandate is to maintain price stability. The ECB’s Governing Council sets key interest rates and makes other monetary-policy decisions for the countries that use the euro. The bank also contributes to banking supervision, manages foreign reserves, and authorizes euro banknote issuance within the Eurosystem.

The ECB is often confused with the European Investment Bank. The EIB finances investment and development projects, whereas the ECB conducts monetary policy. The euro itself entered electronic use in 1999 and began circulating as notes and coins in 2002.