ECB Insight: De Cos – Basel Over Frankfurt, for Now

7 July 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 consider it timely to examine some of the policymakers regarded as potential Board candidates.

Following closer looks at Olli Rehn and Klaas Knot, it is now the turn of former ECB Governing Council member and Bank of Spain Governor Pablo Hernández de Cos. All three share strong credentials and have figured prominently in speculation about future ECB leadership configurations.

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.

If we only took into account professional qualifications in answering the question of who should be most likely to succeed current ECB President Christine Lagarde when her term is over at the end of October 2027, then de Cos—like Knot—would surely deserve special consideration.

We were struck last year at how often de Cos’ peers seemed to expect that one way or another, he was bound to turn up again at the highest echelons of euro area monetary policymaking. And whether it was a hawk or a dove expressing that view, reluctance to countenance such a scenario was not obvious.

In other words, de Cos is liked and respected on both sides of the aisle.

That respect owes much to his impeccable credentials. A veteran of the Spanish central bank, which he joined as an economist in 1997, in 2004—brand new economics PhD in hand—he went to the ECB to serve as advisor to the Executive Board.

After returning to Madrid in 2007, De Cos spent eight years as head of the Economic Policy Analysis division within the Bank of Spain’s Directorate General of Economics, Statistics and Research. In 2015, he was appointed head of the directorate, from which position he was promoted in 2018 to governor of the institution.

A year later, he also became chair of the Basel Committee as well as of the Advisory Technical Committee of the European Systemic Risk Board, cementing his reputation as a deeply technical policymaker focussed on financial stability.

When his non-renewable six-year term at the Bank of Spain came to an end in June 2024, de Cos wasted no time securing a post befitting him: General Manager of the Bank for International Settlements, the central bank of central banks.

That job started last Tuesday, meaning that de Cos—still relatively young at 56 years and nine months when Lagarde exits stage left—would be institutionally well placed to return to Frankfurt, though the timing now seems to argue against it.

It is difficult to imagine de Cos stepping away from the BIS to take any Executive Board position short of the presidency—and even that would be far from a straightforward decision.

The role in Basel is not only prestigious, but also symbolically associated with institutional continuity and global stability. Leaving it less than halfway through his five-year term, without an exceptional rationale, could raise eyebrows and risk unsettling perceptions of reliability at the BIS—an outcome the institution would likely view as unacceptable.

When Lagarde leaves in late 2027, de Cos will be just two years and four months into his Basel engagement. Even that timing would require careful justification. By contrast, the idea of his departing after only 11 months—just to succeed de Guindos, and likely not as vice president—feels downright implausible.

Which brings us to another question, namely that of geographical claims to Executive Board representation.

Spain already had the experience of doing without one of its nationals on the Board, for six years between the departure of José Manuel González-Páramo at the end of May 2012 and the arrival of de Guindos on 1 June 2018.

It is presumably in no hurry to repeat this state of affairs, but may have no choice when de Guindos leaves. We think only Germany, France and Italy will—for the foreseeable future—invariably manage to secure one Board seat each for a national.

Even if Madrid managed to replace de Guindos seamlessly with a Spaniard (leaving aside the issue of the vice presidency), this would either foreclose de Cos’ route to the presidency or require an unsavoury arrangement.

In the latter scenario, the new Spanish national would, in effect, be no more than a bench-warmer, maintaining the country’s grip on a Board slot until Lagarde leaves, at which point de Cos could come.

Even if someone were found to discharge this task, we doubt such an arrangement would remain under wraps for long, and the optics leave much to be desired.

Another theoretical possibility would involve a bit of a gamble in which Spain would initially relinquish its seat—letting de Guindos be replaced by the national of another country—with an informal understanding that 17 months later, de Cos would have at least a strong shot at succeeding Lagarde.

Such an arrangement would not be without precedent at the ECB. In particular, when Vice President Christian Noyer left the Board at the end of May 2002, he was not replaced by another French national.

Instead, Paris allowed Greece’s Lucas Papademos to succeed Noyer, thus ensuring the fulfilment of a pre-existing informal agreement according to which France’s Jean-Claude Trichet would become president—which, exactly 17 months later, is what happened.

While such a deal would also surely become known, European governments might find favour in the idea of settling a thorny personnel question in advance and ensuring an orderly transition.

A further selling point of this scenario could be that they would wind up with an ECB President de Cos. Given de Cos’ wide appeal, this aspect could clinch such a deal, relaxing any Spanish concerns about a dark horse of another nationality stealing the position at the last moment.

And while we said we would not get into domestic politics here, it is worth noting that de Cos is apolitical, which makes him a safer bet across shifting national coalitions.

An obvious objection is that the French might balk at having ‘their’ seat go to a Spaniard even temporarily—but political ingenuity has resolved such tensions before. With Philip Lane’s spell on the Board up at the end of May of the same year, and Isabel Schnabel’s mandate drawing to a close a mere two months after Lagarde’s, there would surely be a way to make the pieces fit.

But again, our more fundamental objection is that de Cos would not turn his back on the BIS less than halfway into his first term there. Accordingly, when all is said and done, we remain sceptical of seeing de Cos become ECB president two years from now.

If de Cos were to stay parked in Basel for ten years, meaning a second five-year GM term that would be over at the end of June 2035, he would be 64 years and five months old when the ECB presidency would presumably need filling again.

An appointment then could make him the oldest incoming ECB president in the institution’s still-short history—though only by a thin margin. He would be a mere four months older than Mario Draghi in 2011 and seven months older than Lagarde when she became president in 2019.

He may consider this an option.

We aren’t in the business of hagiographies, so we must consider whether there are any obvious strikes against de Cos. His English may be one, given that—as in the case of Rehn—it lacks the fluidity of previous ECB presidents.

It is no fatal flaw. De Cos in any case compensates by being an unusually careful communicator. Like Lagarde, he is fond of reading and can be depended on to adhere closely, rigidly even, to a prepared text. His Bank of Spain speeches were often so exhaustive that they could have served as reference works.

Then there is the fact that gender is increasingly a consideration. To the extent that one considers European Investment Bank President Nadia Calviño, another Spanish national we discussed here earlier, equally well qualified, then a de Cos appointment could require an extra portion of justifying.

On the other hand, the mere fact of his being from the euro area’s periphery is hard to hold against him. Though he may lean dovish, he does not stray far from the center and above all is always at pains to present cogent arguments.

His positions thus tend to reflect institutional orthodoxy, with a technocratic tone aligned with ECB consensus-building rather than ideological leanings.

In particular, he has consistently supported data-dependent and balanced policy approaches and has at times emphasised the need for caution when tightening, particularly when inflation risks appeared to be receding.

De Cos has shown little inclination to make the kind of unvarnished or provocative public statements associated with, say, Bank of Greece Governor Yannis Stournaras or Banco de Portugal Governor Mário Centeno.

Rather, during his time on the Council, de Cos was known for low-profile but substantive contributions that often bridged differing camps.

What makes him stand out is not just his experience, but the balance he strikes: methodical without being too dry, visible without being self-promoting, and technocratic without lapsing into opacity. His low political profile and disciplined adherence to institutional norms allow him to be taken seriously across the full spectrum of euro area policymakers.

While he may lack the political instincts or public flair associated with past ECB presidents, he compensates with intellectual discipline and broad cross-border credibility.

In sum, if the ECB seeks a globally‑respected technocrat versed in macroprudential frameworks who can articulate the intersection of monetary and financial stability, then de Cos could be a compelling contender.

Still, all signs point to his having already found his calling—for at least the next five years.