Glossary · Money and central banks
European Central Bank
The European Central Bank (ECB) is the central bank of the euro: it sets one interest rate for every country that uses the currency.
Also called: ECB, Eurosystem, ECB interest rate, ECB deposit rate
In effect since September 16, 2026
Average for the year. Goal: 2%.
Total assets, November 6, 2026
In plain words
Before 1999 Germany had the mark, France the franc and Italy the lira, each with its own central bank and its own interest rate. Then they and others swapped them for one currency, the euro, with one interest rate set by one bank: the European Central Bank, or ECB, in Frankfurt.
Since Bulgaria joined in January 2026, 21 EU countries use the euro. Their national central banks, such as Germany’s Bundesbank or the Banque de France, still exist and do much of the daily work; together with the ECB they form the Eurosystem. But the big decision, the interest rate, is taken once for all of them by the ECB’s Governing Council.
The ECB’s main goal is written into the EU treaties: price stability, which it defines as inflation of 2% over the medium term. Its key rate is the deposit facility rate, the interest banks earn on money they park with it overnight: 2.50%, in effect since September 16, 2026.
Example
A bank with €1 billion to spare
- A euro area bank has €1 billion more than it needs and parks it at the ECB overnight.
- At a deposit rate of 2%, it earns €1,000,000,000 × 2% ÷ 360 = €55,556 for the night.
- From September 2019 to July 2022 the rate was −0.5%: the same bank paid about €13,889 a night to keep its money there.
- Every bank in the euro area faces the same rate, so one decision reaches loans and deposits from Lisbon to Helsinki.
What banks earn at the ECB is the floor for what they accept elsewhere, so this one rate steers every euro interest rate.
One level deeper
The ECB has three key rates. Banks can borrow overnight at the marginal lending rate (the top), borrow for a week at the main refinancing rate, and deposit overnight at the deposit facility rate (the bottom). For years the main refinancing rate was the headline one. But after 2015 the ECB’s bond buying left banks with so much spare money that the deposit rate became the one that mattered, and in March 2024 the ECB confirmed it would keep steering with it.
The deposit rate went below zero in June 2014 and stayed there until July 2022, about 8 years, reaching a low of −0.50%. In the same years the ECB bought trillions of euros of bonds (quantitative easing). The Eurosystem’s balance sheet peaked at €8.84T in June 2022.
Running one rate for many economies is the ECB’s special difficulty: the same rate can be too high for a country in a slump and too low for one that is booming. In the 2010–2012 debt crisis, borrowing costs of some euro countries soared until the ECB’s president Mario Draghi promised in July 2012 to do “whatever it takes” to preserve the euro, and backed the promise with a bond-buying program that never had to be used.
The ECB’s rate and euro area inflation since 1999
Each point is one year. The ECB raised its rate when inflation ran above 2%, and cut it, even below zero, when inflation ran low. Inflation peaked at 8.4% in 2022, the highest since the euro began.
In 2022–2023 the ECB raised its rates faster than ever before.
The numbers behind the chart
| Date | ECB deposit rate (yearly average) | Euro area inflation (HICP) |
|---|---|---|
| 1999 | 1.71% | 1.10% |
| 2000 | 3.06% | 2.10% |
| 2010 | 0.25% | 1.60% |
| 2020 | −0.50% | 0.30% |
| 2021 | −0.50% | 2.60% |
| 2022 | 0.17% | 8.40% |
| 2023 | 3.38% | 5.40% |
| 2024 | 3.69% | 2.40% |
| 2025 | 2.23% | 2.10% |
Why it matters
The ECB’s rate sets borrowing costs for hundreds of millions of people: home loans in Spain, business loans in Germany, savings in Italy.
Its decisions move the euro’s exchange rate, and with it the price of imports and of European goods sold abroad.
Its bond buying keeps euro governments’ borrowing costs in check, which makes it central to the euro’s survival in a crisis.
A common mistake
Myth: Each euro country still sets its own interest rate through its national central bank.
In fact: Since 1999 the key rate is set once for the whole euro area by the ECB’s Governing Council, where each national central bank governor has a seat. National central banks carry out the decisions; they cannot pick a rate of their own.
Questions people ask
What is the ECB interest rate now?
The deposit facility rate, which the ECB uses to steer, is 2.50%, in effect since September 16, 2026. News reports often quote the main refinancing rate, which is a little higher.
How often does the ECB decide on interest rates?
Every six weeks: eight monetary policy meetings a year, each followed by a press conference by the ECB’s president.
Is the ECB the European Union’s central bank?
It is the central bank of the euro. EU countries that keep their own currency, such as Sweden, Poland or Denmark, have their own central banks and set their own rates. The European Investment Bank is a different institution: it lends for projects.
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About the numbers
- The numbers on this page are recalculated from the data every night; the sources are listed at the end of the page.
- Eurosystem: total assets: European Central Bank, Eurosystem consolidated weekly financial statement, series ILM.W.U2.C.T000000.Z5.Z01 (ECB Data Portal).
- Euro area inflation (HICP), annual average: European Central Bank / Eurostat, ECB Data Portal, series ICP.A.U2.N.000000.4.AVR (HICP overall index, euro area, annual average rate of change).
- ECB deposit facility rate: European Central Bank, ECB Data Portal, series FM.B.U2.EUR.4F.KR.DFR.LEV (key ECB interest rates: deposit facility).
- Bulgaria adopted the euro on 1 January 2026; the ECB stopped publishing a reference rate for the Bulgarian lev at the end of 2025.
- The interest in the example counts a 360-day year, as euro money markets do.
- This page explains a term. It is not investment advice.