20 May, 2011

IMF: the runners and riders

The starters are lining up. The post of IMF Head has been European for all its 63 years, except when the European head has resigned (Horst Kohler of Germany and DSK) and the deputy has carried on. In all except 12 of the last 48 years it has been held by a Frenchman. The US holds 17% of the votes, Europe 25%, China only 4.4% (according to a formula established after World War II).

Here they are, then.

Christine Lagarde, 55 Finance Minister, France. The French are putting it about that she is a financial rock star but in fact she is neither of those things, being a lawyer and having silver-grey hair (although so does Jimmy Page). She is wedded to the existing policy of bailouts, but is possibly the best hope for those who want a European in the job. The Bookies' favourite.


Axel Weber, 55, ex-head of German Bundesbank. Mrs Merkel is known to want a tough, disciplinary German in the job. That is to say that she is happy with the bailout policy but wants rigid financial discipline imposed on the bailed out countries. Weber had been proposed for the ECB job but turned it down.

Augustin Carstens, 52, Governor of the Bank of Mexico, worked at the IMF 2003-6 a positive hawk who would be less sympathetic than DSK was to the European cause.

Trevor Manuel, 55 finance Minister, S.Africa, 1996-2009. Well regarded economist, some doubt his abilities with the bureaucracy.

Kemal Dervis, ex-economy minister, Turkey very highly regarded, and has experience of rescheduling a failed country’s debt (his own). May not be recommended by Turkey, which would exclude him.

Stanley Fischer, Governor Central Bank of Israel, 1st Deputy MD IMF 1994-2001 A positive hawk, with experience of the IMF. But Israeli.....

John Lipsky current acting MD of the IMF, he had wanted to stand down in August. American, which means if he wanted the job the US could not realistically have the World Bank head.

Mario Draghi (see below) Governor of the Bank of Italy. Had been earmarked for the ECB but who knows....

Tharman Shanmugaratnam, Finance Minister of Singapore, chair IMF monetary & financial committee. Many people think it right that the job should go to an Asian Tiger. He is sound, knows the IMF and would be my preferred candidate if I could pronounce his name.

Lagarde has said that Europe should field only one candidate (don’t know if she has anyone in mind) but it is not certain that France and Germany can agree on this. Equally it is not certain the other countries can field a single preferred choice. In my view the system is hopelessly outdated and needs some fresh blood.

There may be other candidates but these seem the most likely. They’re under starter’s orders....

No comments: