2015-01-01
Bank of Lithuania became part of the Eurosystem, gaining the right to participate in making the ECB’s most important decisions
With Lithuania entering the euro area, the Bank of Lithuania became part of the Eurosystem and together with the European Central Bank (ECB) and the central banks of the other euro area countries will participate in the establishing and implementation of the euro area’s monetary policy, management of the ECB’s official foreign reserves, supervision of the euro area’s banks and other important financial issues.
“Lithuania, from a nation importing the euro area’s monetary policy, is becoming a full-fledged member of the club of nations that make the decisions on this policy. Our country gains a voice in seeking price stability in the euro area and in dealing with other issues relevant to businesses and the public, related to the crediting environment and financial stability,” says Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania.
The Chairman of the Board of the Bank of Lithuania from the beginning of this year has a voting right at the ECB Governing Council’s meetings. This Council is the main decision-making governing structure of the ECB, forming the euro area’s monetary policy, setting anchor interest rates and envisaging operational guidelines, which ensure the implementation of the tasks assigned to the Eurosystem.
In becoming part of the Eurosystem, our country’s central bank will contribute to the management of the ECB’s foreign reserves and will also gain the right to a share of the ECB’s profit and the Eurosystem monetary policy’s income, proportional to the Bank of Lithuania’s share in the ECB’s paid-up capital.
Entering the euro area, Lithuania became part of the European banking union, which is being created, and joined the Single Supervisory Mechanism. This means that direct supervision of the three largest Lithuanian banks — AB SEB bank, Swedbank, AB and AB DNB bank — will be taken over by the ECB; however it will rely on the Bank of Lithuania’s staff, their resources and experience. The Bank of Lithuania also gained a voting right in the ECB’s Supervisory Board, which deals with the most important issues of the euro area banking supervision.