The European Central Bank (ECB) functions as the central institution for the eurozone, operating through specialized decision-making bodies including the Governing Council, the Executive Board, and the General Council. It works by formulating and implementing monetary policy for the countries that have adopted the euro, primarily through setting key official interest rates, conducting open market operations, managing foreign exchange reserves, and overseeing prudential supervision of credit institutions within the European banking union to safeguard overall financial stability.