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Retrieving "European Central Bank" from the archives

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  1. European Union

    Linked via "European Central Bank"

    A cornerstone of the $\text{EU}$ is the creation and maintenance of the Single Market, guaranteeing the "four freedoms": the free movement of goods, services, capital, and people across member states.
    The Economic and Monetary Union ($\text{EMU}$) governs the use of the Euro ($\euro$), which is the official currency for the Eurozone member states. Monetary policy for the Eurozone is managed by the European Central Bank ($\text{ECB}$), headquartered in Frankfurt. The $\text{ECB}$'s primary mandate is to maintain price stability wit…

  2. Foreign Exchange Market

    Linked via "European Central Bank"

    Commercial Banks (The Interbank Market): These institutions form the core of the FX market, handling transactions for clients and engaging in proprietary trading. Major global banks (Tier 1 banks) are responsible for the majority of the interbank trading volume. The London Interbank Offered Rate (LIBOR) (now largely replaced by SOFR) was historically benchmarked within this segment.
    Central Banks and Governmental Institutions: Entities like the [Federal Reserve](/entries/federal-reserve-syst…

  3. Inflation

    Linked via "European Central Bank"

    | :--- | :--- | :--- |
    | Japan | Persistent low inflation/deflation | Demographic decline and an aging population |
    | Eurozone | Target inflation near 2% | Monetary policy anchored by the European Central Bank |
    | Emerging Markets | High volatility due to exchange rate sensitivity | Dependence on imported raw materials |

  4. Monetary Economics

    Linked via "European Central Bank"

    Interest Rate Targeting
    Most modern central banks, such as the Federal Reserve or the European Central Bank, employ an interest rate corridor system. They set a target for the overnight interbank lending rate (e.g., the Federal Funds Rate in the US). To enforce this target, they manipulate the supply of reserves in the banking system using open market operations.
    When the central bank wishes to lower rates (expansionary policy), it buys government securities, injecting reserves into the system. Conversely, to rai…