ECB Insight: Klaas Knot—President-in-Waiting?

30 June 2025

By David Barwick – FRANKFURT (Econostream) – With less than a year to go until the next anticipated vacancy on the European Central Bank’s Executive Board—Vice President Luis de Guindos is set to depart at the end of May 2026—we continue our examination of some of the policymakers regarded as potential Board candidates.

Having considered Olli Rehn last week, we now look at outgoing ECB Governing Council member and De Nederlandsche Bank Governor Klaas Knot.

As usual, we leave aside for present purposes the critical role domestic politics will play in determining national backing, and likewise refrain from venturing into the thicket of other high-level EU appointments, though these will provide essential context when the time comes.

Of all the names floated, no policymaker combines academic authority, market credibility and institutional experience the way Knot does. He brings a deep understanding of monetary economics and central banking frameworks, supported by 14 years of running the central bank of a core euro area economy.

Since December 2021, he has chaired the Financial Stability Board, following three years as its vice chair. He commands high market credibility and communicates more sure-footedly in English than any other Governing Council member.

It is thus natural that Knot, who will turn 59 a few weeks before de Guindos bows out, is seen not just as a candidate for any ECB Executive Board seat, but to succeed President Christine Lagarde when her term is over at the end of October 2027.

The notion that Knot is too hawkish for the ECB presidency—particularly given the heterogeneity of the euro area—has long circulated and likely hindered his candidacy the last time around.

This objection however does not withstand scrutiny today, and not simply because Lagarde’s predecessor, Mario Draghi—sometimes with limited regard for the supposedly collegial nature of ECB policymaking—pursued a consistently dovish—and at times controversial—monetary policy.

More importantly, the argument also falters on a closer examination of Knot’s Governing Council record, in which it would only be fair to attach greater weight to his last seven years than to the previous seven.

Such an examination belies the notion that Knot is not perfectly capable of supporting institutional consensus, including when it means cutting interest rates or coming up with other accommodative instruments as circumstances demand.

Far from being inflexibly hawkish, he has shown a clear ability to adapt to evolving conditions.

And while his more moderate latter-day approach to monetary policy is undeniable, as FSB chair he has acted as a bridge-builder, navigating his way through diverse constellations of interests under G20 presidencies as varied as Indonesia, India, Brazil and South Africa—and more recently the new Trump administration.

His style is technocratic rather than overtly political, and while that lends him authority, it raises the question of how he would manage a fragmented Council under pressure.

Lagarde’s presidency has been defined by her ability to produce consensus—often by sidelining her own views—and it remains to be seen whether Knot, whose preferences are more clearly articulated, would command the same cohesion in moments of crisis.

He is nonetheless an obvious—probably the most obvious—contender to answer the now-perennial question: when will the ECB presidency return to the North?

But by one reading, Knot has a problem whose name is Frank Elderson, a Dutch national with an ECB Executive Board mandate that doesn’t expire until the middle of December 2028.

In principle, Elderson could be nudged out, notwithstanding ECB independence. There is precedent: Lorenzo Bini Smaghi was ultimately pressured into resigning in December 2011 so that another Italian—Draghi—could assume the presidency.

In response to Dutch daily Het Financieele Dagblad’s not-so-subtle reminder during an interview last January that Knot’s term would be ending this year, Elderson called it ‘an honour … to be the second Dutch member to serve on the Executive Board.’

‘I have a European mandate and it’s for eight years,’ he continued. ‘And I’ll be staying here for eight years.’

In other words, there would be no browbeating Elderson into leaving early just so that Knot could assume his post. What else could he plausibly say? Denials of that sort are the only permissible response.

We attach more importance to Elderson’s apt observation that he is the second Dutchman on the Board.

That the first Dutchman was ECB President Wim Duisenberg could complicate matters, as some may see the Netherlands as having already had its turn at the top, though Duisenberg's term was only about half the normal length. (That the French have had two full-length turns is of course not the same thing, especially from the perspective of the French.)

Even so, the Netherlands, though not one of the big four euro area member states, has now had two shots at Board positions; many others have had one or, in the case of newer members, none.

That could be an issue, though much depends on how tenaciously the larger countries cling to ‘their’ Board spots, and on how sincere expressions of a willingness going forward to share such positions with newer euro area entrants turn out to be.

Admitting the latter for consideration would introduce additional competition for the same six seats on the Board, albeit not the presidency for the foreseeable future.

However, there is another interpretation of the fact that Elderson is on the Board, namely that the heavy lifting of securing a Dutch presence has already been done, making it only a question of whether the seat can be transferred to a higher-calibre candidate without fracturing the consensus.

As noted, history shows that Elderson’s declared intention to remain to the very end of his term is not an intractable problem. Put another way, Elderson may not prove so much an obstacle as a gateway for Knot.

When all is said and done, we think Knot’s record and credentials assure him of a decent chance of obtaining at least a regular Board position and very possibly the number one slot.

Yet another factor in his favour could be a well-placed word of support from Lagarde. Since losing out to her for the job six years ago, he has been nothing but a good soldier, disciplined, loyal, and aligned with the institutional ethos.

And as we have observed here previously, she can be thankful to have had to contend as ECB president with only one Robert Holzmann on the Council, referring to the Austrian National Bank’s ultra-hawkish governor.

There can be little doubt that Knot would like the job—what more fitting culmination to a distinguished career in financial policymaking?

Anyone unsure of his interest need only consider his interview in Friday’s Financial Times, which reads in part as an exercise in positioning.

In it, Knot makes a point of dispelling any lingering suspicion that he remains tethered to the hardline instincts of his early years under Draghi.

‘“Whatever it takes” and the outright monetary transactions revealed acceptance that homogeneity of monetary transmission cannot be separated from taking some form of lender of last resort role in sovereign bond markets’, he said.

‘Mario Draghi showed us all that these things cannot be separated, and that the ECB will have to accept this role if it is to pursue its own mandate of fulfilling price stability within the euro area.’

Noteworthy here is not just the forthright acceptance that the buck—or rather, the euro—stops with the ECB. Equally telling is Knot’s decision to pair this acknowledgment with high praise for Lagarde’s predecessor—someone with whom he, like others, had a complicated relationship.

‘[W]ith safeguards in place, I was in full support [of the OMT], and I recognized very quickly the brilliance of the comments that Mario Draghi had made’, he said.

Knot’s route to the Executive Board—let alone the presidency—will depend heavily on what he does after his DNB mandate. Positions that allow him to remain visibly engaged in financial stability and macroeconomic affairs would help preserve his relevance.

One apparently logical stopover might have been the job of General Manager of the Bank for International Settlements—a post that went to former Banco de España Governor Pablo Hernández de Cos, by some accounts his chief rival for the ECB presidency.

However, here too there is another reading, namely that the BIS job may very well have the effect of removing de Cos from the field—leaving the BIS so soon even for the ECB presidency would have its downsides, as we will discuss next week when we look more closely at de Cos.

Knot could conceivably return to academia or join a major think tank, reinforcing his primary engagement with suitable committee positions, regular public appearances and thought-leader contributions on topics of the day.

By contrast, a move into a less central, more politically peripheral role—whether in national politics or an advisory post with limited policy salience—would make it harder to maintain momentum.

Signing on with a private financial institution would almost certainly foreclose his candidacy.

Knot’s technocratic profile and institutional gravitas make him an unusually attractive candidate now, but with the euro area’s political economy prone to rapid shifts, remaining visible and relevant will be key. Relevance can evaporate quickly if visibility fades.

For the moment, however, he remains very much in contention—and with good reason.