The official site of Italy's central bank

General

The Eurosystem is the system of central banks of the euro area responsible for the conduct of the single monetary policy. It comprises the European Central Bank and the national central banks (NCBs) of those EU Member States that have adopted the euro. As from 1 January 2011 the euro area comprises seventeen countries: Austria, Belgium, Germany, Greece, Finland, France, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia, Spain, Cyprus, Malta, Slovakia and Estonia.

The ESCB is made up of the ECB and the NCBs of 27 EU Member States (Austria, Belgium, Germany, Greece, Finland, France, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia, Spain, the United Kingdom, Denmark, Sweden, Cyprus, Estonia, Latvia, Lithuania, Malta, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, and Romania).

The ECB, which has legal personality under Community law, is the centre of the ESCB and the Eurosystem. It makes sure that the tasks assigned to these institutions are performed, either through its own activities or through the NCBs, under the Statute of the ESCB/ECB.

Each NCB has legal personality under its national legislation. As an integral part of the Eurosystem, the euro-area NCBs perform the duties assigned to the Eurosystem under the rules set by the decision-making bodies of the ECB. Under their own responsibility they may perform tasks foreign to the Eurosystem providing that, in the judgment of the Governing Council, these do not conflict with the objectives and tasks of the Eurosystem.

ECB’s capital and reserves

The ECB’s capital is subscribed solely by the NCBs according to shares (capital key) which are calculated as the equally weighted sum of the respective country’s shares of the total GDP and the total population of the European Union (see Articles 28 and 29 of the Statute of the ESCB/ECB).
The shares in the subscribed capital of the ECB are paid up in full by the Eurosystem NCBs. For the non-euro area NCBs, the ECB sets a minimum share to be paid up (currently 3,75% of the subscribed capital) as a contribution to its operational costs (see Article 48 of the Statute of the ESCB/ECB).

In addition to the capital, the Eurosystem NCBs provide the ECB with a share of their foreign reserve assets, in proportion to their capital key shares. In return, they are credited with a remunerated claim (see Article 30 of the Statute of the ESCB/ECB).

The ECB can decide to increase its capital (above the EUR 5 billion originally prescribed by Article 28 of the Statute of the ESCB/ECB) or make further calls for foreign reserve assets (above the limit of EUR 50 billion originally prescribed by Article 30 of the Statute of the ESCB/ECB) within the limits and according to the conditions set by the EU Council.

However, when one or more countries become EU Member States and the respective central banks become members of the ESCB, both the subscribed capital of the ECB and the total foreign reserve assets which can be transferred to the ECB are automatically increased in accordance with Article 49 of the Statute of the ESCB/ECB. With effect from 29 December 2010, the ECB increased its subscribed capital by €5 billion, from €5.76 billion to €10.76 billion The euro area NCBs paid their first instalment of their additional capital contributions on 29 December 2010 and the remaining two instalments will be paid at the end of 2011 and 2012, respectively.

The Bank of Italy’s share in the subscribed capital of the ECB, as of 29 December 2010, is around EUR 1345 million.

Monetary income

The capital key shares of the Eurosystem NCBs are also used for the allocation of the monetary income accruing to the NCBs in the performance of monetary policy functions (see Article 32 of the Statute of the ESCB/ECB). Monetary income is defined as the net income derived from assets held against monetary liabilities (mainly banknotes in circulation and bank deposits).

Moreover, Article 32 of the Statute provides that the ECB settle the balances resulting from the allocation of monetary income. These balances are calculated as the difference, for each NCB, between the monetary income derived from its balance sheet and the share in the total monetary income of the Eurosystem which would be owed to it on the basis of the capital key.