Christine Lagarde will leave the ECB early. She steps down Feb. 7, 2027.

Christine Lagarde will leave the European Central Bank early. She told her colleagues on Thursday, Oct. 29, that she will step down Feb. 7, 2027. “It has been a source of great pride to serve this institution,” she wrote on X.

Her eight-year term was set to end Oct. 31, 2027, so she leaves about nine months early, according to AP. The ECB’s Governing Council “thanked President Lagarde warmly and gave her a long standing ovation,” the bank said.

Her words. In a video message, she said she leaves “with a sense of good work done and an ECB that is fit for the future,” The Guardian reported.

Her tenure. Lagarde has led the ECB since November 2019, according to AP and the Council of the EU. She steered its response to the Covid-19 pandemic, the war in Ukraine and a run of energy price shocks that pushed inflation in the European Union above 11% in 2022, CNBC reported. That surge ended the era of negative interest rates that followed the financial crisis, according to CNBC.

The thanks. European Council President António Costa said Lagarde had informed him of her intention to step down. “I respectfully acknowledge her decision,” he said in a statement. He said she had given “steady and determined stewardship” through “a global pandemic, a war in Europe, energy crises and inflation shocks.”

Why it matters. The ECB sets interest rates for the 21 countries that use the euro, according to AP. Its president leads the Governing Council, which makes those calls. Markets showed little reaction to the news, Reuters reported.

What’s next. The European Council will choose her successor under Article 283 of the EU treaty, the ECB said. European Council President António Costa said the search would begin immediately, Reuters reported. Eurogroup President Kyriakos Pierrakakis said the group of euro-area finance ministers will “act swiftly.”

How the pick works. Euro-area leaders in the European Council appoint the president for one eight-year term that cannot be renewed, according to the Council. Candidates must be a citizen of a euro-area country with “recognised standing and professional experience in monetary or banking matters.” The Council consults the European Parliament and the ECB’s Governing Council before it decides. Costa said the process “will proceed without delay.”

The timing lets European leaders choose a successor before France’s presidential election next year, AP reported.

More seats to fill. Lagarde is not the only senior figure leaving. Chief economist Philip Lane and executive board member Isabel Schnabel, who is responsible for market operations, are also due to step down next year, CNBC reported. Boris Vujčić became vice president on June 1, 2026, the Council said.

Who might replace her. Klaas Knot, the former head of the Dutch central bank, and Pablo Hernández de Cos, the former Bank of Spain governor who now runs the Bank for International Settlements, are leading contenders, CNBC reported. Reuters said the two are widely seen as frontrunners.

The contenders’ records. Hernández de Cos led the Bank of Spain from 2018 to 2024, and Knot ran the Dutch central bank from 2011 to 2025, CNBC reported. Knot is now a visiting fellow at the Peterson Institute for International Economics, according to CNBC.

This is news, not financial advice.