ANNUAL REPORT 2008 - Polymer Bank Notes of the World

MANAGEMENT REPORT FOR THE YEARENDING 31 DECEMBER 20081 NATURE OF THE BUSINESSThe ECB’s activities in 2008 are described indetail in the relevant chapters of the AnnualReport.2 OBJECTIVES AND TASKSThe ECB’s objectives and tasks are describedin the Statute of the ESCB (Articles 2 and 3).An overview of performance against theseobjectives is included in the President’sforeword to the Annual Report.3 KEY RESOURCES, RISKS AND PROCESSESGOVERNANCE OF THE ECBInformation relating to the governance of theECB is given in Chapter 8.MEMBERS OF THE EXECUTIVE BOARDThe members of the Executive Board are appointedfrom among persons of recognised standing andprofessional experience in monetary or bankingmatters by common accord of the governmentsof the Member States at the level of the Headsof State or Government, upon a recommendationfrom the EU Council after it has consulted theEuropean Parliament and the Governing Council.The terms and conditions of members’employment are determined by the GoverningCouncil, based on a proposal from a Committeecomprising three members appointed bythe Governing Council and three membersappointed by the EU Council.The emoluments of the members of theExecutive Board are set out in note 29 “Staffcosts” of the Annual Accounts.in 2007 to 1,499 in 2008. At the end of that year1,536 staff were employed. For further details,see note 29 “Staff costs” of the Annual Accountsand Chapter 8, Section 2, which also describesthe ECB’s human resources strategy.INVESTMENT ACTIVITIES AND RISK MANAGEMENTThe ECB’s foreign reserves portfolio consists offoreign reserve assets transferred to it by the euroarea NCBs in accordance with the provisionsof Article 30 of the Statute of the ESCB, andthe income thereon. It serves to fund the ECB’soperations in the foreign exchange market forthe purposes set out in the Treaty.The ECB’s own funds portfolio reflects theinvestment of its paid-up capital, the counterpartof the provision against foreign exchange,interest rate and gold price risks, the generalreserve fund and income accumulated on theportfolio in the past. Its purpose is to provide theECB with income to contribute to the coverageof its operating expenses.The ECB’s investment activities and itsmanagement of the associated risks are describedin greater detail in Chapter 2.THE BUDGET PROCESSThe Budget Committee (BUCOM), composedof ECB and euro area NCB experts, is a keycontributor to the ECB’s financial governanceprocess. In accordance with Article 15 of theRules of Procedure, BUCOM supports theGoverning Council by providing a detailedevaluation of annual ECB budget proposals andrequests for supplementary budget funding bythe Executive Board, prior to their submission tothe Governing Council for approval. Spendingagainst agreed budgets is monitored regularlyby the Executive Board, taking into accountthe advice of the ECB’s internal controllingEMPLOYEESThe average number of staff (full-time equivalent)holding contracts with the ECB 1 rose from 1,4481Staff on unpaid leave of absence are excluded. This numberincludes staff with permanent, fixed or short-term contracts andthe participants in the ECB’s Graduate Programme. Staff onmaternity or long-term sick leave are also included.ECBAnnual Report2008213