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European Central Bank meeting

Our guide to the European Central Bank (ECB) Governing Council announcement – including why it’s important for traders, and its role in shaping the European economy.


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How does the ECB meeting affect traders?

The ECB’s Governing Council is responsible for setting monetary policy, with the aim of achieving an inflation rate of just under 2% across the euro area. Governing Council meetings are important dates in traders’ calendars as they set the official interest rates for the eurozone.

The ECB requires national central banks (NCBs) in the eurosystem to use these rates for transactions with commercial banks. The three key rates are:

  • The minimum bid rate: the rate for one-week loans
  • The deposit rate: the rate paid on deposits held with NCBs
  • The marginal lending rate: the rate for overnight loans

In addition to setting these rates, the Governing Council can also apply quantitative easing (QE) as required. QE involves injecting money directly into the economy with the aim of boosting spending.

These policies have a strong influence on the interest rates set by commercial banks and other lenders, indirectly affecting spending and inflation across the eurozone.

Of course, traders and investors are particularly concerned about the impact of ECB policy on demand for stocks, bonds, currencies and other securities, which may cause them to change their strategies. Many traders will therefore try to predict which way monetary policy is heading ahead of each meeting.

Why is ECB monetary policy important to traders?

Traders look to gain an understanding of what monetary policy will be in the future. If they can get their predictions right, they can optimise their portfolios ahead of any announcement to maximise their profits and limit losses.

Traders expect interest rate hikes to cause ripple effects that will reduce the value of their stocks, bonds and other securities, but increase the value of the euro relative to other currencies. Conversely, lower interest rates or the implementation of quantitative easing is likely to have the opposite effect.

Traders will therefore look at the composition of the Governing Council, the distribution of voting rights between countries, and broader economic factors such as Brexit, to make predictions about which way the ECB will vote.

Markets to watch

What are the key ECB rate decisions?

The main way the Governing Council seeks to control inflation is by changing key European interest rates, including the minimum bid rate, deposit rate and marginal lending rate.

1. Minimum bid rate

The minimum bid rate is the rate national central banks (NCBs) in the eurosystem must charge for one-week loans. This is sometimes referred to as the main refinancing rate or ECB refi rate.

This rate is the lowest rate at which commercial banks can borrow capital, effectively acting as the base rate of interest for the eurozone. It has a strong influence on the interest rates charged by commercial banks to businesses and consumers. This, in turn, will affect the amount of spending, borrowing and saving across the economy.

2. Deposit rate

The deposit rate is the rate of interest paid on overnight deposits made with NCBs in the eurosystem. If the rate is increased, commercial banks get a better return on money deposited with NCBs. All other things being equal, this should encourage them to deposit more funds with NCBs and give fewer overnight loans to other commercial banks in the system.

The opposite is true if the rate goes down - banks get a lower return on any money deposited with the NCBs, which encourages them to deposit less money and give more overnight loans. The deposit rate is therefore another way the Governing Council can influence the supply of money in the economy.

3. Marginal lending rate

The marginal lending rate is the rate NCBs must charge commercial banks for overnight loans. These are loans used by banks to meet their reserve requirements for the day, ensuring they have enough cash to meet their clients’ needs.

The ECB sets this rate above the minimum bid rate to penalise banks for borrowing emergency funds to meet their reserve requirements. The wider the gap – or corridor – between the marginal lending rate and deposit rate, the greater the penalty. This corridor therefore affects how conservative banks are with their capital, and how willing they are to give loans to commercial and retail clients. This, in turn, affects spending across the economy.

ECB meeting schedule

The Governing Council assembles twice a month in Frankfurt, Germany. It has two types of meetings: a monetary policy meeting, held every six weeks, and a non-monetary policy meeting in which it discusses the other responsibilities of the ECB.

The meeting dates for 2022 are as follows.

ECB meeting calendar 2022

Monetary policy meeting and announcement

Non-monetary policy meeting



3 February

16 February

10 March

23 March

14 April


9 June*

22 June

21 July

6 July



8 September

21 September

27 October

5 October


9 and 30 November

15 December


*not in Frankfurt

Who are the key people on the Governing Council?

There are 21 voting rights to be shared between the 25 representatives on the Governing Council. All six members of the ECB’s executive board get a vote at each meeting and the remaining 15 votes are distributed between two groups:

  • Group 1: This includes the five countries with the largest economies. They share four voting rights, which rotate between countries on a monthly basis
  • Group 2: This includes the remaining 14 countries. They share 11 voting rights, which rotate between countries on a monthly basis

Analysts look to classify Governing Council members as either monetary hawks or doves with the aim of predicting future policy.

2022 committee members

ECB Executive Board



Christine Lagarde

President of the ECB

Luis de Guindos

Vice-president of the ECB

Fabio Panetta

Member of the executive board of the ECB

Isabel Schnabel

Member of the executive board of the ECB

Philip R. Lane

Member of the executive board of the ECB

Frank Elderson Member of the execution board of the ECB

Group 1



Jens Weidmann

President, Deutsche Bundesbank

François Villeroy de Galhau

Governor, Bank of France (Banque de France)

Ignazio Visco

Governor, Bank of Italy (Banca d'Italia)

Pablo Hernández de Cos

Governor, Bank of Spain (Banco de España)

Klaas Knot

President, The Dutch Bank (De Nederlandsche Bank)

Group 2


Pierre Wunsch Governor, National Bank of Belgium (Nationale Bank van België)
Madis Müller Governor, The Bank of Estonia (Eesti Pank)
Gabriel Makhlouf Governor, Central Bank of Ireland
Yannis Stournaras Governor, Bank of Greece (Τράπεζα της Ελλάδος)
Constantinos Herodotou Governor, Central Bank of Cyprus
Mārtiņš Kazāks Governor, Bank of Latvia (Latvijas Banka)
Vitas Vasiliauskas Chairman of the Board, Bank of Lithuania (Lietuvos Bankas)
Gaston Reinesch Governor, Central Bank of Luxembourg (Banque centrale du Luxembourg)
Edward Scicluna Governor, Central Bank of Malta
Robert Holzmann Governor, Oesterreichische Nationalbank
Mario Centeno Governor, Bank of Portugal (Banco de Portugal)
Boštjan Vasle Governor, Bank of Slovenia (Banka Slovenije)
Peter Kažimír Governor, National Bank of Slovakia (Národná banka Slovenska)
Olli Rehn Governor, Bank of Finland (Suomen Pankki)

What is the Governing Council monetary policy meeting?

The aim of the Governing Council’s monetary policy meeting is to set key interest rates and other policies that will maintain price stability across the euro area. Maintaining price stability is the primary aim of the ECB itself according to the Treaty on the Functioning of the European Union, making the monetary policy meetings the most important in the ECB’s calendar.

The Governing Council defines ‘price stability’ as ‘a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%.’ In the medium term the council aims to achieve an inflation rate close to, but below, 2%.

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1It’s important to realise that members’ views are not fixed and likely to change over time based on the economy and the council’s inflation rate targets. The table above illustrates where the members were thought to stand at the time of writing (20 October 2017).

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