Why does the National Bank still exist in the European Monetary Union?
The National Bank has lost none of its usefulness since the Eurosystem was established. Its governor is a member of the Governing Council of the European Central Bank (ECB), which takes the monetary policy decisions in which he participates. The National Bank takes part in the preparation and implementation of those decisions.
Under the Maastricht Treaty, the European Central Bank (ECB) and the national central banks (NCBs) share the right to issue banknotes. Contrary to what some people say, the National Bank has therefore never lost its right of issue, as confirmed by a judgment passed by the Court of Arbitration on 10 December 2003. Moreover, the ECB and the NCBs of the euro area together hold the assets constituting the counterpart to the banknotes issued. The National Bank therefore has a share in the allocation of the resulting profit, or seigniorage. That profit is shared out according to the ECB’s subscribed capital key, which takes account of the population and gross domestic product (GDP) of the various countries.
In the Eurosystem it is the national central banks that place the euro banknotes and coins in circulation. Thus, the National Bank is involved in the manufacture of euro banknotes and manages their circulation (placing in circulation, quality control, etc.) in Belgium.
Apart from the functions associated with its participation in the Eurosystem, the Bank performs various tasks of public interest or services for the banking system. These have generally remained unchanged since the advent of the European Monetary Union. That applies, for example, to the operation of the Central Balance Sheet Office and the central credit offices, the State Cashier service and the management of the interbank payment systems.