Finance
Analysis-ECB board revamp exposes diversity failings that could impact policy
Published by Global Banking & Finance Review®
Posted on November 17, 2025
5 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on November 17, 2025
5 min readLast updated: January 21, 2026
The ECB's board revamp exposes significant diversity issues, potentially affecting policy decisions. Upcoming appointments offer a chance to address these gaps.
By Balazs Koranyi and Francesco Canepa
FRANKFURT (Reuters) -Euro zone officials have embarked on a two-year process to replace most of the European Central Bank's executive board, including President Christine Lagarde, raising questions along the way about how well the institution represents the people it serves.
In contrast to the U.S. Federal Reserve, which gets a new leader next year and faces criticism from the Trump administration over interest rates, the ECB can be sure its independence will not be challenged in the reshuffle and policy will not be questioned.
Yet, the same EU institutional complexities that shield the ECB from politics in deciding policy, have also left it trailing the already-weak diversity record of global central banking - a field dominated by white men from big Western economies.
The first chance to address some of the disparities comes early next year when the term of ECB Vice President Luis de Guindos of Spain expires.
LACK OF DIVERSITY CAN LEAVE BLIND SPOTS
The lack of geographic, gender and ethnic diversity, critics argue, leaves the bank with blind spots on the economy of a 20 nation bloc of 350 million people. Policymakers may lack the full picture on how households really experience hardships, inflation and interest rates.
The bank's lack of diversity is glaring. On its 26 member rate-setting Governing Council, there are 24 men. All the 20 national central bank governors that sit on this council, selected in national capitals, are men.
Meanwhile the six-person board, picked through the EU, has been dominated by men from the big four euro zone members - France, Germany, Italy and Spain. Former communist countries in the east, making up a third of the bloc, have never held a seat.
The six board members, who sit on the council, run the ECB's day-to-day operations. Lagarde, a former French economy minister, is the first woman to have led the board. Since its inception in 1998, women have held 19% of ECB board seats.
"When it comes to female representation, the ECB’s track record is appalling," Maria Demertzis, economy, strategy and finance center leader for Europe at The Conference Board think-tank said.
"Diversity matters," Demertzis added. "You cannot have good decisions if people making them represent just a very specific, narrow segment of society, when your objective is to serve society."
FIRST CHANGE COULD BE A TACTICAL 'GIVEAWAY'
Croatia, Finland, Greece, Latvia and Portugal have all thrown their hat into the race to replace de Guindos, suggesting that a smaller nation, possibly from the east, will get a chance.
But the role may be seen as the least important among the four upcoming seats. The chief economist, the head of market operations and the president will be replaced in 2027 as their non-renewable terms also expire.
"If they pick an Eastern European, it will be a symbolic giveaway because the VP role itself is not that influential," ING economist Carsten Brzeski said. "If I was sitting in Berlin or Paris, I'd say, it's fine, let them have it, so we can concentrate on the more important positions."
In contrast to the ECB, the Bank of England's nine-member Monetary Policy Committee now has a female majority after years of political and public pressure to correct a gender imbalance. At the Swedish central bank, the board is split 50-50 while in Norway, the board has a slight male majority but a female governor.
The Fed's rate-setting FOMC has also become more diverse, although President Donald Trump is reversing some of this as he is trying to fire Lisa Cook, the first Black woman on the body, and already picked a man to replace a vacancy left by a woman.
The greater problem may be that finance is dominated by men and there are not enough women rising up through the ranks.
A working paper published by the Dallas Fed last year argued that there was barely any improvement on the staff level as the share of women among economists in the Fed system rose to just 22% from 20% in 20 years.
CALL FOR 'BIGGER PICTURE' APPROACH TO CHANGES
The ECB, which has no official role in board selection, declined to comment on the process.
Lagarde, who has warned that inflation hurts the poor, the vulnerable and women the most, has repeatedly made the case for greater inclusion and set ambitious targets for hiring more women staff. But she has little influence over who becomes a policymaker.
Finance ministers of the 20 euro zone nations nominate board members while EU leaders make the formal selection after they are heard by the European Parliament, which oversees the ECB.
The European Parliament can filibuster appointments, as it has already done several times over gender objections, but it cannot stop them.
"The fact that there are four roles to be replaced is actually an advantage as it allows for an overall package to be made," Markus Ferber, a member of the European Parliament's Committee on Economic and Monetary Affairs, said, adding that diversity was a relevant consideration.
"It is always easier to tick all the boxes if you have a package of candidates," he said. "I will advocate in the European Parliament that we do not look at each candidate separately, but look at the bigger picture."
A 2020 study by Bocconi University and Trinity College researchers argued that women at central banks are more hawkish in fighting inflation and a higher presence of women on central bank boards may thus be desirable for the credibility of central banks.
"With Lagarde at the top, the ECB has the right conditions to make a change, but they are stuck," Demertzis said. "They just don’t have the pipeline of women coming in to make their way to the top."
(Additional reporting by David Milliken, Ann Saphir and Jan Strupczewski; Editing by Alison Williams)
The European Central Bank (ECB) is the central bank for the euro and administers monetary policy within the Eurozone, which consists of 20 European Union countries.
Monetary policy refers to the actions taken by a central bank to control the money supply and interest rates to achieve macroeconomic goals such as controlling inflation and maintaining employment.
Diversity in banking refers to the representation of different genders, ethnicities, and backgrounds within financial institutions, which can enhance decision-making and reflect the demographics of the populations served.
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