Lagarde will leave the ECB in February, nearly nine months early
The ECB president said she wants the freedom to speak on matters beyond monetary policy. Her successor will be picked by EU leaders.
By James Mitchell ·
Why it matters: Whoever replaces Lagarde will lead the ECB's rate-setters, and the pick comes as French bond spreads sit at their widest since the early 2010s.
For information only, not investment advice.
European Central Bank President Christine Lagarde will step down on Feb. 7, 2027, the ECB said Thursday. That's nearly nine months before her term was due to end in October 2027, CNBC reported. Her successor will be appointed by the European Council under the EU treaty's nomination process, according to the ECB, and CNBC reported the process begins immediately.
Speaking at the press conference after the bank's October rate decision, Lagarde said she was leaving early to speak more freely, according to CNBC:
The reason I'm anticipating the end of my term by leaving in February 2027 instead of October is, as I have said to colleagues, members of staff and governors, is because I want to have the freedom of speech, the freedom of expression and the freedom to engage on matters that are not monetary policy matters.
Her exit comes ahead of the French presidential election next spring, and French bond spreads over Germany have risen to their widest since the euro-area debt crisis of the early 2010s, CNBC reported. Felix Feather, an economist at Aberdeen Investments, said in comments reported by CNBC that the early exit leaves the next French president with no role in choosing her successor.
The two names CNBC says are widely seen as top contenders are Spain's Pablo Hernández de Cos, now general manager of the Bank for International Settlements, and the Netherlands' Klaas Knot, seen as the more hawkish of the pair. Chief economist Philip Lane and Isabel Schnabel are also due to step down next year, according to CNBC.
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Tags: europe · interest-rates