On June 1, 1998, a new institution was created, the European Central Bank (ECB), charged with steering the single monetary policy for the euro. The body formed by the ECB, and the national central banks (NCB) of all the member states of the European Union, constitute the European System of Central Banks (ESCB).
The ESCB is an institutional framework of a single monetary policy for the euro. According to the Banque de France's website, the "sharing of responsibilities between the ECB and the NCBs is based upon significant decentralization of the conduct of the ESCB's single monetary policy".
1993 A landmark reform granted the Bank independence, in order to ensure price stability, regardless of domestic politics. This reform cleared the path for the European monetary union.
France’s economy was hurt by the United States attacks of September 11 and by the poor results of the German economy.
France was already coming very close to the 3% of GDP in debt, so the thought of increasing government expenditure was not the best option under the Growth Pact of the European Union.
France openly admitted that they will not cut back on their deficit spending so the ECB is hesitant to cut interest rates.(Cooper and Madigen) This was bold move for French Government and the Banque de France, because they were deliberately defying the European Union, the ESCB, and the ECB.
The Bank was financed with an initial capital of 36,000,000 frs., obtained partly from the original capital of the Caisse des Comptes Courants, partly by new subscription by the public and partly from Government funds, obtained from the sinking fund of the national debt.
The representations of the departmental banks to the Chamber of Deputies, on the occasion of the discussions of the renewal of the charter of the Bank of France, asking for modifications of their statutes in the direction of removing some of the restrictions they contained, were also unsuccessful.
It was his idea that the aim of the Bank of France must be to discount for all commercial firms of reasonable standing at 4 percent, and he criticised the Bank for not being liberal enough, and it was at his instance that the rate was reduced to 4 percent in 1807.
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