Thought leadership at the European Central Bank
With a lawyer at the head of the ECB, and a number of non-economists on the boards of the national central banks, some economists are criticising the alleged lack of economic expertise among top central bank staff. This criticism is certainly not directed at ECB Executive Board member Isabel Schnabel. The 52-year-old completed her degree in economics at the University of Mannheim as the best student in her year with a grade of 1.0. She then embarked on a stellar academic career that led to her appointment as a member of the ECB Governing Council in 2020 - and a whole host of prizes.
Global economy prize for Isabel Schnabel
As of 23 June, the list includes the Economics category of the Global Economy Prize 2024. Moritz Schularick, President of the Kiel Institute for the World Economy (IfW Kiel), said that he was delighted to be able to honour an internationally outstanding economist and far-sighted monetary policymaker. The IfW presents the award together with the state capital Kiel and the Schleswig-Holstein Chamber of Commerce and Industry. „Through your pioneering research, you have made a significant contribution to deepening our understanding of the links between monetary policy, financial markets and economic growth,“ said Schularick.
The other award winners are Nicola Leibinger-Kammüller, Chairwoman of the Management Board of the mechanical engineering company Trumpf, in the Business category, and the former Chief Economist of the OECD, Laurence Boone, in the Politics category. Schularick honoured Leibinger-Kammüller as a leading figure of the social market economy, and Boone as an exceptionally versatile economist and politician, who has always focussed on the pressing issues of European integration.
Highly acclaimed speeches
Far-sighted is a term that is repeatedly used in connection with Isabel Schnabel. She argued in favour of interest rate hikes in 2022 much earlier than ECB Chief Economist Philip Lane, for example, and concerns herself with explaining ECB monetary policy to people in an understandable way. She also regularly addresses fundamental and forward-looking monetary policy issues. At the end of May, she addressed the effects of the ECB's bond purchases on monetary policy and inflation in a highly acclaimed lecture at a conference in Tokyo. She warned that in future this instrument should only be used in times of crisis.
Another topic that Schnabel recently raised for discussion was that the individual central bankers could each publish their interest rate forecasts, similar to the Fed. She also suggested that the ECB could communicate alternative inflation scenarios to a greater extent. In other words, which factors could lead to inflation developing differently from the central bank's main scenario, and how high inflation would then be.
Influential
Just how renowned Schnabel is can also be seen from the fact that in 2022, it was not ECB President Christine Lagarde but the German who represented the central bank at the world's most influential central bank conference in Jackson Hole. In addition, the Dortmund native and BVB supporter is the only person besides ECB Chief Economist Philip Lane to give a presentation on the situation on the markets during each monetary policy council meeting. „This gives me a bit of an opportunity to set the tone and point out certain developments that then also play a role in the subsequent decision,“ Schnabel told „Hessischer Rundfunk“. She assumes that this will give her a more significant influence on the ECB's interest rate decisions.
Her family plays a vital role in Schnabel's life. „I would NEVER have done without children,“ Schnabel said in an interview with Brigitte in 2015. It was not easy for the mother of three daughters to juggle bringing up children and working. Even though her husband, also an economist, had always been involved in childcare and housework. When the children were younger, Schnabel would occasionally take them to her consultations during her time as a professor.
During the week, the ECB Director has little available time for her family. That's why she tries to keep the weekends free for joint activities, at least until Sunday evening. There is also regular contact from Monday to Friday. Every morning when she is in Frankfurt, Schnabel sends her daughters a photo of the ECB building via Snapchat. Depending on how the light is falling, the building always looks different, Schnabel enthuses about her office.
The ECB Director also uses social media in her communication with the public. She is just as active on X as she is on Instagram. These channels are a natural part of her communication. This is something she has learnt from her children.
Far-sighted as Schnabel is, she also has a plan for what she wants to do when her term of office at the ECB ends on 31 December 2027. She then wants to return to teaching at the University of Bonn.
