ECB Director Isabel Schnabel moves to the IMF – successor open

The German ECB director Isabel Schnabel is stepping down early at the beginning of 2027 and moving to the International Monetary Fund (IMF). As the European Central Bank (ECB) announced, the step will take effect at the beginning of January 2027.

Schnabel will take over as head of the money and capital markets department at the IMF on January 4th. "Until then, Ms. Schnabel will remain in her current position and continue to carry out her duties." As director, she is responsible for the market operations department.

European Council clarifies succession

The ECB's Ethics Committee decided that no transition phase was necessary. However, due to her move, Schnabel will no longer be involved in IMF-related matters during her remaining time on the Governing Council. The successor will be clarified by the European Council.

If necessary, Schnabel's duties on the board of directors would be temporarily divided among the remaining members after she leaves, the central bank said. Her eight-year term at the ECB actually doesn't expire until the end of 2027.

Schnabel was a strong supporter of the euro

Schnabel became a leading advocate of crisis-fighting tools such as government bond purchases, arguing that intervention in government bond markets was essential to prevent financial fragmentation and ultimately protect the euro.

"Our commitment to the euro is our tool against fragmentation," Schnabel said in 2022. "This commitment knows no boundaries. And our track record of intervening when necessary underpins this commitment."

These comments, which paved the way for the ECB's announcement of a new and as yet unused bond-buying program in the summer of that year, followed on from former ECB President Mario Draghi's promise. A decade ago he called for “doing everything necessary” to preserve the euro.

ECB boss Christine Lagarde thanked Schnabel “for her outstanding contribution” over the past seven years. She made a significant contribution to modernizing the way the ECB works in order to meet the challenges of the 21st century.

Three top positions to be filled

With her early departure, it is now more likely that there will be a package solution when filling top positions at the ECB. The government leaders of the euro countries could fill three vacant positions on the ECB Executive Board. The term of office of chief economist Philip Lane ends in June 2027 and that of ECB President Lagarde ends in October 2027.

There have been rumors for months that Lagarde could leave her post before France's presidential elections in April 2027 to make the search for a successor easier. According to media reports, the Frenchwoman could take over the presidency of the World Economic Forum in 2027.

“Package solution” for multiple items?

Although any country can theoretically claim Schnabel's position, Germany, France and Italy de facto have a permanent seat on the board. However, if Germany were to simply replace Schnabel with another candidate, it would be tantamount to not running for the ECB presidency as soon as Lagarde's post becomes vacant.

For that reason, people familiar with the matter believe that an agreement on Schnabel's seat is likely to include the other two positions.

Bundesbank President Nagel as possible head of the ECB

Spain is lobbying for Pablo Hernández de Cos, general manager of the Bank for International Settlements, to become ECB president. The Netherlands is bringing its former central bank chief Klaas Knot into play. In addition, Bundesbank President Joachim Nagel is also considered a candidate for the top job at the ECB. Meanwhile, France is hoping to secure the job of chief economist, according to people familiar with the matter.

Along with Lagarde, Schnabel is the only woman on the ECB's executive board. The Executive Board of the ECB consists of the President, the Vice-President and four other members, each appointed for a non-renewable term of eight years.

German representatives with short terms of office

Schnabel's early withdrawal is part of a series of early departures of German representatives from the ECB. ECB Director Jürgen Stark left early at the end of 2011. Council member Jörg Asmussen held his post for less than two years. And the German director Sabine Lautenschläger left her chair early at the end of October 2019.