Christine Lagarde's term runs until October 2027. But there has been speculation that the 70-year-old economist, who was previously France's finance minister, would resign ahead of France's presidential election this spring.
Lagarde herself has indicated that she might consider helping with campaigns ahead of the presidential election, but has ruled out running as a candidate.
Speculation about Davos jobs
There has also been speculation that she will take over as chair of the World Economic Forum in Davos, according to the Financial Times.
The ECB faces a growing inflation threat from soaring energy prices and turmoil in bond markets stemming from weak public finances in eurozone countries such as France. The central bank will also soon lose its chief economist, Philip Lane. Executive board member Isabel Schnabel is also set to leave the ECB early next year to take a senior position at the International Monetary Fund (IMF).
Spaniard Pablo Hernández de Cos and Dutchman Klaas Knot have been identified as possible successors to Lagarde.
Could be a hot question
The heads of state and government in the European Council will decide who takes the role. The council is chaired by Portugal's António Costa.
"To ensure a smooth transition to the next leadership of the ECB, the process to appoint her successor will start today and proceed without delay, with a view to a timely decision by the European Council," Costa wrote in a press release.
At least 16 of the 21 eurozone countries, representing at least 65 percent of the bloc's total population, must support the new leader.
The question of new ECB members will likely be one of the hottest topics at the EU summits in November and December this year.
Lagarde took office in 2019, replacing Italy's Mario Draghi. She has led the ECB through the worst pandemic in living memory, the bloodiest war in Europe since World War II, and an acute inflation shock in 2022-2023, followed by a trade war with the United States since Donald Trump took office.
