Executive Board member Isabel Schnabel will leave the European Central Bank (ECB) early to take a senior job at the International Monetary Fund (IMF).
The German official has been selected as director of the monetary and capital markets department, where she will start on Jan 4, the ECB said in a statement on Sept 24.
“The new role offers an opportunity to promote global monetary and financial stability and foster international collaboration at a time when the global economy faces profound transformation,” Schnabel said in a letter to staff seen by Bloomberg News.
Her premature exit adds urgency to the 2027 leadership shakeup at the Frankfurt-based ECB, with President Christine Lagarde and Chief Economist Philip Lane also set to go.
European Union leaders will try to agree on all three appointments at once, potentially at a summit in December.
France and Germany are looking to maintain their presence on the ECB’s Executive Board and Spain is pushing for a seat after Vice-President Luis de Guindos retired early 2026.
Lagarde herself may be on the way out. She is being pursued to head the World Economic Forum, the organiser of the annual Davos conference, and is interested in taking over.
Lagarde said last week that she will leave the ECB in 2027, without specifying if she would see out her term until its conclusion in October.
The frontrunners for her job include former Dutch and Spanish central-bank chiefs Klaas Knot and Pablo Hernandez de Cos. The latter was endorsed by his prime minister in a Bloomberg Television interview on Sept 23.
“A successor will be appointed by the European Council in accordance with the procedure set out in the Treaty on the Functioning of the European Union,” the ECB said on Sept 24.
“If necessary, Ms Schnabel’s Executive Board responsibilities will be temporarily reassigned among the remaining members of the Executive Board after her departure.”
Bloomberg News reported Schnabel was set to leave for the IMF position earlier Sept 24. Schnabel’s interest in the IMF job was reported by Handelsblatt at the start of September.
Schnabel, 55, who will succeed Tobias Adrian at the IMF, had said she would be ready to take over from Lagarde but never featured among the favorites.
That is in part down to her being the most hawkish official at the ECB of late, standing squarely behind the two increases in interest rates since the Iran war erupted.
Suggesting further tightening may be necessary, she recently called the latest energy-price rises “quite concerning”.
Her switch to the IMF will raise pressure on Germany to decide what it wants at the ECB.
While it has never held the presidency and Bundesbank President Joachim Nagel is interested in Lagarde’s role, Ursula von der Leyen’s presence as European Commission chief is a major obstacle.
That may prompt Berlin to target one of the other positions instead.
Part of the considerations in EU capitals is female representation in the ECB’s top echelon – an even more acute issue with Schnabel leaving and a man likely to succeed Lagarde.
Schnabel’s early exit extends the list of Germans quitting the Governing Council before their time is up.
Since the ECB was founded in 1999, just one Bundesbank president and one Executive Board member from Germany have finished their terms as scheduled.
For the IMF, Schnabel’s move is part of a broader personnel overhaul that is also bringing more women and hands-on practitioners into leadership roles.
“Throughout her impressive career, Isabel has demonstrated intellectual leadership in research and in practical policymaking,” IMF Managing Director Kristalina Georgieva said in a statement.
“Her deep expertise at the intersection of central banking, capital markets, and financial stability will be invaluable.”
Schnabel holds a PhD in economics from the University of Mannheim and has been a professor of financial economics at both the University of Bonn. She also served on the German Council of Economic Experts.
Silvana Tenreyro, a former external member of the Bank of England’s rate-setting committee, became the fund’s chief economist in August, just weeks after ex-Polish Finance Minister Mateusz Szczurek took over as head of the European department.
Economics professor Ricardo Reis was considered the frontrunner for Tenreyro’s job until a sudden, last-minute reversal, according to the Financial Times.
While that was attributed to his public criticism of Donald Trump’s tariff policies, the IMF “categorically” denied that any candidate was disqualified based on academic views regarding levies.
In the past, Schnabel also argued that Trump’s policies boosted uncertainty and fractured global free trade, warning of risks to central-bank independence during pressure from the president on the Federal Reserve and then-chair Jerome Powell. BLOOMBERG
