Germany and the European Central Bank
After an initial period when each German state had its own central bank, Germany’s first nationwide central bank, the Reichsbank, was established in 1876. The initial currency issued was the goldmark, which was successively replaced by the papiermark, the rentenmark and the reichsmark, until the Deutsche mark and the East German mark were introduced in West and East Germany respectively in 1948. The Deutsche mark became the sole legal tender of unified Germany on July 1, 1990. The Deutsche Bundesbank was established in 1957 by the Bundesbank Act. Since the inception of the Eurozone, the bank is no longer responsible for the day-to-day conduct of monetary policy or for acting as the lender of last resort. Instead, it focuses on assessing risks to the German financial and monetary system and issues euro bank notes in conjunction with the European Central Bank. The Deutsche Bundesbank is guaranteed statutory independence and has served as the model for the European Central Bank in some ways. The ECB guides the monetary policy of the Eurozone, the primary goal of which is price stability. Its Governing Council assesses the economic situation and monetary developments and makes its monetary policy decisions every six weeks.
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