Role of the Central Bank within the Eurosystem
The Central Bank is a member of the Eurosystem, which consists of the European Central Bank (ECB) and the National Central Banks (NCBs) of those Member States that have adopted the euro. This group of institutions is responsible for conducting and implementing the single monetary policy for the currency union with the primary objective of maintaining price stability.
The involvement of the Central Bank in the formulation and implementation of monetary policy is wide ranging. It includes the provision of advice and analysis to the Governor regarding developments in the euro area against the backdrop of the international economic environment. This analysis includes macroeconomic and inflation forecasts, monetary and financial sector analysis, assessment of the public finances, labour market issues and developments in banking, both for Ireland and in an area-wide context. The Central Bank participates in the Monetary Policy Committee which focuses on strategic issues relating to the formulation of the monetary policy.
As well as conducting and implementing the single monetary policy, the Eurosystem conducts foreign exchange operations, holds and manage the official foreign reserves of the Member States and promotes the orderly operation of the payment systems. The Eurosystem also contributes to the smooth conduct of policies relating to the prudential supervision of credit institutions and the stability of the financial system. The Central Bank’s staff participate in this work through a variety of ECB committees and working groups.