Eurozone governments have begun a two-year reshuffle of the European Central Bank’s top leadership that will see most of its executive board change, including President Christine Lagarde.
The process is reviving long-standing questions over how far the central bank’s decision-makers reflect the 350 million people whose economy they manage – and whether the lack of diversity could affect monetary policy.
Unlike the US Federal Reserve, which faces an open confrontation with President Donald Trump over interest rates and the attempted removal of Governor Lisa Cook, the ECB’s independence is not in doubt. In the euro area, the complex balance of powers between member states and EU institutions largely insulates the central bank from direct political pressure on policy.
Instead, the debate is focused on who sits around the table. Of the ECB’s 26-member Governing Council – made up of the six-strong executive board and the 20 national central bank governors – 24 are men. All 20 governors are male, and the executive board has historically been dominated by figures from the four largest eurozone economies: France, Germany, Italy and Spain. Since the euro’s launch in 1999, former communist member states in central and eastern Europe, which now account for about a third of the currency area, have never held a board seat.
Women remain a small minority. Lagarde is the first female president of the ECB and, together with market operations chief Isabel Schnabel, one of only two women currently on the Governing Council. Since the institution was created, women have held just under a fifth of all board seats.
The immediate focus is on the vice-presidency. The term of Luis de Guindos of Spain expires early next year, and Croatia, Finland, Greece, Latvia and Portugal are all vying to place a candidate. That contest is widely seen in Brussels and Frankfurt as an opportunity to appoint someone from a smaller or eastern member state, even if the post is viewed as less central than the jobs of chief economist, markets director or president, which all fall vacant in 2027.
Economist Carsten Brzeski of ING suggests the vice-presidency could become a tactical concession in the wider horse-trading over the four posts. If a candidate from central or eastern Europe is chosen, he argues, larger member states might treat it as a symbolic gesture while concentrating their efforts on securing the more powerful positions in the next round of appointments.
Other central banks in Europe have moved faster. The Bank of England’s nine-member Monetary Policy Committee now has a female majority after years of pressure from Parliament and civil society. Sweden’s Riksbank has a board split evenly between men and women, while Norway’s central bank combines a female governor with a board that is close to parity.
The Federal Reserve’s rate-setting committee has also become more diverse in recent years, with the appointment of Cook as the first Black woman governor. That change has, however, been accompanied by legal and political battles: Trump is seeking to remove her over allegations of mortgage fraud that she denies, in a case now before the US Supreme Court.
Research suggests that the composition of monetary policy boards is not merely a question of symbolism. A 2020 paper by academics from Bocconi University and Trinity College Dublin found that women in central banks tended to take a more “hawkish” stance on inflation, and that boards with a higher share of women were associated with higher policy rates for a given level of price growth. More recent work using a broader panel of countries reaches similar conclusions, indicating that boards with more women respond more strongly when inflation rises.
At the same time, the pool of potential female candidates remains limited. Central banking and economics are still heavily male professions. A Dallas Federal Reserve working paper cited by analysts notes that the share of women among economists in the Fed system has risen only modestly in two decades, from about 20% to roughly 22%, a pattern echoed in many advanced economies.
Lagarde has repeatedly warned that inflation falls hardest on lower-income households and on women, and she has set internal targets to increase female representation among staff. But the ECB as an institution has no formal role in choosing its own board. Candidates are nominated by the finance ministers of the 20 eurozone countries and appointed by EU leaders, after a non-binding opinion from the European Parliament.
MEPs have, on occasion, delayed or challenged nominees on gender grounds, but they cannot veto appointments outright. Markus Ferber, a member of the European Parliament’s economic and monetary affairs committee, says the unusual coincidence of four vacancies creates scope for a more balanced outcome. He argues that the nominations should be assessed “as a package”, allowing governments to factor in nationality, gender and professional background across the board rather than seat by seat.
The coming two years will therefore test whether eurozone governments are prepared to use the reshuffle to alter the profile of the ECB’s leadership, or whether established patterns of national bargaining will prevail. Lagarde has put the case for change, but the pipeline of women reaching the top ranks of finance and central banking remains thin. For now, the gap between the ECB’s ambition to reflect the society it serves and the make-up of its most powerful committee remains wide.
