This archive report was first published on 4 July 2019.
July 4, 2019 - The International Monetary Fund (IMF) has been forced into an early leadership search following the departure of Christine Lagarde, who has stepped down as the IMF's managing director to lead the European Central Bank.
Lagarde, who has held the position since 2011, led the IMF bailouts to restore order following the global financial meltdown. Her nomination to lead the European Central Bank has left a vacancy at the IMF, which is now being filled ahead of schedule.
While large emerging market nations have long called for more representation in important financial bodies to reflect their increased weight in the global economy, the choice of American David Malpass to lead the World Bank, the IMF's sister institution, earlier this year showed that the unwritten rule remains in place.
"The ease with which the US preserved the duopoly, means the Europeans will definitely want to keep their mitts on it," former US Treasury official Mark Sobel told AFP.
Early candidates mentioned as possible successors to Lagarde include Bank of France chief François Villeroy de Galhau, French politician Pierre Moscovici, the EU finance commissioner, and Mark Carney, a Canadian who also holds British and Irish citizenship and whose term as leader of the Bank of England is up next year.
Another possibility is Kristalina Georgieva, the Bulgarian chief operating officer of the World Bank, who served as its interim president before Malpass was named. If selected, she would only be the second woman to lead one of the institutions.
Advanced economies were the epicenter of the 2008 global financial crisis, and in the aftermath the leaders of the Group of 20 countries agreed that major developing nations like China, India and Brazil should have greater representation in the multinational institutions, including serving in leadership roles.
However, when the top job at the IMF suddenly opened up in 2011, the European nations balked, arguing that the time was not right. Emerging markets called out the hypocrisy but never unified behind Agustin Carstens, then head of the Mexican central bank and now leader of the Bank for International Settlements.
Carstens was the lone candidate to challenge Lagarde in 2011 but never received sufficient support. When the World Bank job opened up this year, there was no competition to the US choice.
"My view is it should be open to everyone in the world," Sobel said. But the emerging markets "didn't step up to the plate."
