IMF Managing Director Strauss-Kahn Resigns
Thursday, May 19, 2011
Dominique Strauss-Kahn’s resignation as the 10th leader of the International Monetary Fund kicks off a contest on his successor, as European officials seek to retain the job amid a lack of unity among emerging-market nations.
The Washington-based lender that approved a record $91.7 billion in emergency loans last year and provides a third of the euro-region’s bailout packages said it will “communicate in the near future” on the process of finding a new chief. John Lipsky, the No. 2 official at the fund, who is scheduled to retire in August, remains as acting leader, the fund said in its statement.
European officials, who have picked the IMF heads for 65 years under a deal that gives the U.S. the lock on running the World Bank, moved to retain their privilege. Sweden’s finance minister endorsed his French counterpart Christine Lagarde, while Dutch central bank Governor Nout Wellink suggested outgoing European Central Bank President Jean-Claude Trichet.
“Time is of the essence,” said Julie Chon, a senior fellow at the Washington-based Atlantic Council and former adviser to the U.S. Senate Banking Committee. “The longer the IMF allows the specter of uncertainty to hang over its leadership, the more exposed it becomes to the jittery actions of sovereign debt and foreign exchange traders who have been speculating on what the leadership vacuum means for their portfolios.”
IMF Term
Strauss-Kahn’s five-year term had 17 months remaining. In past successions, incoming managing directors were appointed to fresh five-year tenures.
France’s Lagarde “presents very strong leadership” which is “important on building consensus in important issues,” Swedish Finance Minister Anders Borg told Sky News yesterday. Wellink, an ECB Governing Council member, told the Dutch talk show Knevel & Van den Brink late last night: “I know a fantastic candidate, that’s Jean-Claude Trichet,” whose term ends in October.
South Africa and Russia said yesterday the next head of the IFM should come from an emerging economy. Trevor Manuel, head of South Africa’s National Planning Commission, is “highly respected in the world,” Finance Minister Pravin Gordhan said in an interview in Pretoria.
Russian central bank Deputy Chairman Sergei Shvetsov said a developing country should be given the chance to run the IMF to better reflect the role of those economies in global trade. South Korea’s central bank governor made similar remarks before the announcement late yesterday that Strauss-Kahn would resign.
‘Proving My Innocence’
“I want to protect this institution which I have served with honor and devotion, and especially -- especially -- I want to devote all my strength, all my time, and all my energy to proving my innocence,” Strauss-Kahn said in the statement released by the IMF.
Strauss-Kahn was arrested May 14 on accusations of sexually assaulting a hotel maid in New York, and has been held at New York’s Rikers Island jail complex since he was ordered held in custody at his arraignment May 16. A French citizen, he is asking a second judge to release him on bail.
Morris Goldstein, a fellow at the Peterson Institute for International Economics in Washington who was an IMF official for 24 years, said earlier this week that potential emerging- market candidates to head the IMF include Singapore Finance Minister Tharman Shanmugaratnam, former Turkish Economic Minister Kemal Dervis and India’s Montek Singh Ahluwalia, a top economic aide to the prime minister. Turkish Finance Minister Mehmet Simsek said there’s no reason he couldn’t do the job.
“The most important thing is to move decisively to appoint the best qualified person for the job,” Australian Treasurer Wayne Swan said through a spokesman. “Uncertainty around a new Managing Director of the IMF is not in the interests of the global economy or the institution itself.”
posted @ 12:07 PM,
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