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Compare and contrast the European Central Bank with the Federal Reserve (100 marks)

Compare and contrast the European Central Bank with the Federal Reserve (100 marks)

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The Federal Reserve (Fed) and the European Central Bank (ECB) are one of the central banks which embody significant important in the world economy and monetary interactions. These central banks belong to the world's two leading economic areas with the largest GDP shares of the world .

The Fed and the ECB,both,have common characteristics. Basically they are both independent institutions with a decentralized structure and using basic monetary tools such as reserve requirements, and open market operations.However these two central banks are characterised by significant differences in various fields.

The ECB and the Fed have different objectives and different methods to achieve these objectives .The primary objective of the ECB is to achieve price stability ,on the otherhand the Fed has chosen several goals to achieve, basically safe ,flexible and stable monetary stability and financial system.

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