Source: European Central Bank
Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Patricia Hecht and Beate Willms on 5 February 2025
7 March 2025
Ms Schnabel, do you remember the first time you held money in your hand?
That must have been during primary school. I often used my pocket money to buy sweets or an ice lolly.
So money was just a means of payment for you, something that let you buy things?
Exactly. However, my father placed great importance on me understanding how to deal with money early on – even though as a teenager I wasn’t that interested. He later recommended an apprenticeship at a bank to me when I wasn’t sure what to do after I had finished school. And one of his arguments was that I should learn how to manage money.
Did you have the impression he was particularly concerned because you were a girl?
Well, he didn’t make the same suggestion to my brother. That bothered me a little. It was just taken for granted that my brother could deal with money. But, at the end of the day, my father’s recommendation may have been one of the reasons why I ended up in a male-dominated field.
Is it true that women engage too little with money?
I do think so. On average, women have a lower level of financial literacy than men. That’s a problem. It can lead to them making suboptimal financial decisions and possibly ending up in financial difficulties. For example, women are more at risk of poverty in old age. So financial planning is particularly important for women.
Are women themselves to blame for being financially worse off?
There are many structural reasons, for example interrupted career paths due to becoming a mother or caring for elderly relatives. In addition, women are significantly more likely to work part-time. These factors contribute to women having lower incomes and smaller pensions. The insufficient engagement with financial matters is also linked to traditional gender roles. However, there’s also an element of individual responsibility. Just as one needs to think about one’s health, one needs to also deal with finances. Today, there are plenty of ways to get informed, for example, through podcasts or YouTube channels, to name just a few.
Today you are one of the people responsible for deciding on the financing conditions for 350 million people in the euro area, because it’s the ECB’s task to keep inflation in check. Out of the 26 members of the Governing Council, only two are women – Christine Lagarde and you. Is the monetary policy that you pursue different from that of the men?
Research shows that men and women do behave differently when it comes to economic issues. So it is possible that monetary policy may change when more women join the decision-making bodies. What is key here is diversity – also in terms of views and experiences. That’s what makes decision-making more robust.
How do financial decisions made by men and women differ?
Women tend to be more risk-averse in their financial decisions and they are more afraid of losses. This, for example, leads them to invest less in the stock market and thus achieve lower returns. Women also have less confidence in their financial decision-making. So improving financial literacy would be particularly important for women.
Is there a feminist monetary policy?
To be honest, I haven’t really thought about this. Monetary policy used to focus primarily on the economy as a whole, for instance on aggregate economic activity or consumption. Meanwhile, research has evolved and is now looking more into the underlying heterogeneity. We know, for instance, that poorer people are particularly affected by rising energy and food prices. There are likely also noticeable differences across genders.
What are you doing to attract more women to the ECB?
As an institution, we have a keen interest in equal opportunities. This does not always mean a fifty-fifty distribution, but we aim to represent the society for which we make our decisions and to use the entire talent pool available. This is why we have set targets at all levels of hierarchy. In order to achieve those, around half of all new hires and promotions should be women, as long as we are below our targets.
What else are you doing?
We try to remove barriers. Often this concerns obstacles like a lack of childcare. The ECB offers good childcare facilities, starting at infancy, and we also have a European School. Additionally, we noticed that women applied for promotions less frequently than men. When reading a vacancy notice, women have more doubts than men whether they fulfill all the criteria perfectly. We are now more explicitly encouraging women to apply. This strategy has proven to be very successful.
Are salary differences transparent at the ECB?
We are part of the public service, which means that we follow a clear salary structure that depends on qualifications and tasks. Then there are various allowances, which depend on things like staff members’ family situation but not on their gender.
How do you deal with the responsibility for decisions that affect the lives of so many people?
When I learnt in 2019 that I would be nominated for the ECB’s Executive Board, I had just arrived by train at Bonn’s main station. I saw the people on the platform and thought – in the future, I will have to make decisions affecting all these people! That’s a completely different role from that of a researcher, and one that carries a lot of responsibility. I take my job extremely seriously and try to take all decisions to the very best of my knowledge.
You worked at different universities in Germany and the United States for 15 years, became a professor in 2007, and you were also a member of the German Council of Economic Experts. Throughout your career, you were always one of few women – often the only one, as in the case of the ”wise (wo)men”.
The higher you go, the fewer women there are. That is still the case. And it shapes the style of communication. An example was the research seminars at university, where all the professors were men and the tone was often very harsh and aggressive. As a young researcher, that bothered me, and I know my female colleagues felt the same.
How did you deal with it?
I simply accepted it at the time, but it made me feel insecure. You need to have confidence in your career potential. Some women are better at handling a male-dominated environment than others. But there are also women who have a different type of personality. Some of my female colleagues left the university back then.
Does the tone change when there is another woman in the room?
Yes, it changes the entire tone of the conversation. This is especially true when an institution or committee is led by a woman, as is the ECB. Christine Lagarde can set the tone here. I am really impressed by how she manages to create such an inclusive and friendly climate.
Is there something like female solidarity between the two of you?
Absolutely. We have a close personal relationship. We also talk about private matters and we trust each other. She listens to my concerns. I can always approach her and she finds time for me even though she is extremely busy.
Is it different with your male colleagues?
There are a number of male colleagues with whom I have a similarly trusting relationship, but it is indeed different. There is greater emotional closeness among women.
How important are women’s networks in your field?
Very important. It took me a long time to understand that. Today, I am part of many informal women’s networks. It is particularly important to invite younger women and to support each other. Former US Secretary of State, Madeleine Albright, once said there is a special place in hell for women who don’t help other women. We must support each other rather than seeing each other primarily as competitors. I myself benefited from having a female mentor who later became a colleague at the University of Mainz.
You do that too. During the pandemic, your colleague Isabella Weber – a left-leaning economist from the University of Massachusetts who was then in her mid-30s – suggested tackling inflation with strategic price controls. As this contradicted the textbooks, Nobel laureate Paul Krugman, among others, publicly dismissed her idea as “truly stupid”.
I found this treatment of Isabella Weber intolerable. And I had the impression that a man would have been treated differently. That simply shouldn’t be the case. Although I didn’t share the view on price controls, we must be open to consider unconventional ideas. It was probably also about maintaining power and thought leadership. In general, I would find it disastrous if women were discouraged from challenging the mainstream because of this.
Have you yourself ever felt that people were treating you differently because you are a woman?
I experience this constantly on social media. I am sometimes besieged with sexist comments and I then mute those people. But I don’t experience this in my immediate professional environment.
But did you suffer from any disadvantages because of being a woman?
At the beginning of my career, during my studies, I was firmly convinced that it didn’t matter whether one was a man or a woman. I thought I just had to be good enough, and then I would make it. At that time, I wasn’t particularly positive about the promotion of women. It took a while before I realised that there were a number of gender-specific barriers. For example, during my entire university studies in Germany, I didn’t have a single female professor. So I had no role models. These issues became more obvious when I had children. I have three daughters, which means that I was either pregnant or breastfeeding for around six years. The time between the ages of 32 and 38 were very exhausting for me. And that was precisely the critical phase for progressing in an academic career. When I arrived at the office completely rushed in the morning, I already had my first major task behind me. I sometimes struggled with that. Travelling also wasn’t easy when the children were small. I wasn’t very keen on it either, as I wanted to be with my family.
How did you manage it nonetheless?
My doctoral advisor Martin Hellwig played a major role in this. He had helped me to build up networks already during my doctoral studies – before I had children. At the time, I hadn’t yet realised how important that was. When the children came, he gave me complete flexibility.
How soon did you return to work?
Very quickly. With the first child, I was back at my computer right away. With the second, I took my daughter to the office in the beginning. By the time of the third child, I was already a professor, so I brought her with me when commuting by train from Bonn to Mainz during the breastfeeding period. Just getting the stroller into those old trains was a real challenge. All of the commuters knew me – the woman with the baby! At university, I had many people to support me. I sometimes recruited students to look after my baby while I was teaching. I even breastfed during office hours.
Did your husband bring the children to work too?
No, because I was breastfeeding. But it wouldn’t have been possible without him. My husband has always been very involved in our family work, even more so than me in recent years. I now work in Frankfurt, but our family is still in Bonn. Besides, we have had a wonderful nanny for over 20 years, who has been with us every day and helped us tremendously.
Not everyone can afford a nanny.
At the beginning, almost an entire salary went to that. But it’s sometimes overlooked that paid childcare is also an investment. It allows you to stay on your career path. And I always knew that my children were very well taken care of. That’s why I rarely had a guilty conscience.
Did you have to make compromises because of your dual role as a mother and as an economist?
Constantly. One must not have the expectation of being absolutely perfect in each role at all times. Otherwise, you will fail to live up to your own standards. But that wasn’t always easy for me.
What did you have to compromise on?
Mostly on my personal needs – I didn’t have much time for myself. And the same was true for my husband. But we also learned to be efficient. In the evenings, we would sometimes put our children to bed with their tights on to speed things up in the morning.
Have you ever been accused of being a “raven mother” (bad mother)?
Subtly, yes. But I didn’t take on that role. The paediatrician and author Remo Largo once said, in essence, that the most important thing was to be happy as a parent and a good role model. Children imitate what they see. And I believe I am a good mother to my daughters.
It took you a few years to call yourself a feminist. Where do your daughters stand on that today?
My daughters grew up knowing that women can achieve anything they want. Of course they complained from time to time that I wasn’t at home as much as other mothers. But they really like what I do and take it as motivation. My daughters are true feminists who will speak up when they are disadvantaged. I wouldn’t have had the confidence to do that at their age, but of course the world has also changed in that regard.
And how do you introduce them to the topic of money?
My husband and I are both economists and we have often talked about how to deal with money. But they tended to find financial investment rather tedious. Today, two of my daughters are studying economics, so they have automatically come closer to these topics.
Mark Zuckerberg recently said that companies needed more “masculine energy”. Do you find that worrying, also in relation to your daughters?
That worries me a lot. There’s a risk that society will go backwards, even though we are far from where we want to be. In the United States, this is currently more pronounced than it is here. But it’s spilling over. For the ECB, I can say that we stand firmly behind our diversity and inclusion strategy.