This is the supreme governing body of the ECB. It consists of all the members of the Executive Board and the governors of the national central banks of the (20) countries that have adopted the euro.
Its main responsibilities are:
- To adopt the guidelines and take the decisions necessary to ensure the performance of the duties entrusted to the ESCB.
- To formulate monetary policy for the euro area. This includes decisions relating to monetary objectives, key interest rates, the supply of reserves in the Eurosystem, and the establishment of guidelines for the implementation of those decisions.
- In the context of the general framework in which supervisory decisions are adopted, to take decisions and approve, where appropriate, the draft decisions proposed by the Supervisory Board.
When adopting decisions on monetary policy and other Eurosystem functions, the Governing Council members act in a fully independent capacity rather than as representatives of their respective countries. Monetary and supervisory duties are completely separate in the functioning of the Governing Council.
The Governing Council generally meets fortnightly at the ECB headquarters in Frankfurt, although it may also do so by teleconference. Meetings in other euro area countries currently take place once a year, on a rotating basis. The Banco de España headquarters in Madrid hosted the first meeting held outside Frankfurt, on 30 March 2000. The 333rd meeting of the Governing Council was held in Barcelona, on 3 May 2012.
As for decision-taking, each of the Governing Council members has, in principle, a vote. Nevertheless, a rotating system of voting rights has been applied to the central bank governors since 1 January 2015 (when, with Lithuania’s accession, there were then 19 euro area countries) given the increasing number of euro area member countries, and for the purposes of boosting the Governing Council's ability to take action.
Decisions are adopted in most cases by a simple majority. Decisions on assets, capital, transfers of currency and other reserves requiring a qualified majority are exceptions. Here the votes of the national central bank representatives are weighted according to their share in ECB capital.