The European Central Bank fulfills the function for European countries that utilize the Euro as a form of currency much the same as the Federal Reserve functions for the United States of America. The primary job of the ECB is to monitor, administer and maintain the price stability of the Euro and the currency policy of the Eurozone.
As the central bank for 17 of Europe’s countries that have adopted the Euro as currency, the ECB is one of the world’s largest central banks. The ECB is one member of a larger group of national central banks of members of the European Union.
This banking collective is known as the Eurosystem. The ECB within this system is responsible for administering the monetary policy within the Eurozone of member countries for the established currency unit the euro. In addition, the ECB and the Eurosystem work in conjunction with the European System of Central Banks.
The European System of Central Banks is comprised of the ECB and all of the national banks of European Union countries whether or not the countries have adopted the use of the euro currency. The Eurosystem is formed of only the ECB and the national banks of the countries that currently use the euro. The two organizations, the ESCB and the Eurosystem are separate entities that work together. The ECB is a member of both.
The ECB is also responsible for overseeing the production and distribution of banknotes and coins by the national banks of the Eurozone.