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IMF chief Lagarde goes unchallenged in bid for second term

Managing Director of the International Monetary Fund Christine Lagarde

By David Lawder

Christine Lagarde was virtually assured a second term leading the International Monetary Fund on Thursday when nominations for the job closed with no challengers.

The IMF said Lagarde, the first woman to lead the IMF, was the only person nominated for the position. It added that the board will now hold meetings with Lagarde and aims “to complete the selection process, as soon as possible.”

The US Treasury Department supported her re-appointment, adding to earlier endorsements and other signals of support from China, Germany, Britain, France, Italy and Mexico.

“Christine Lagarde has done an exceptional job leading the IMF for the last five years, guiding the Fund at a critical time for the global economy,” US Treasury Secretary Jack Lew said in a statement.

“I’ve seen time and again her ability to bring people together on major global issues and drive toward solutions,” Lew added.

Lagarde’s lock on the job marks a stark contrast to 2011, when former IMF Managing Director Dominique Strauss-Kahn’s resignation amid a sexual assault scandal prompted several big emerging market countries to back their own candidate for the job, which has been traditionally held by a European.

In that contest, Lagarde, a former French finance minister, won out over Mexican central bank governor Agustin Carstens.

During her tenure, Lagarde has overseen the IMF’s handling of Europe’s sovereign debt crisis and steps by the IMF to give a greater voice to China, Brazil and other big developing countries. In a major nod to Beijing’s growing clout, the Fund included the yuan in its benchmark basket of currencies last year.

In December, the Fund also won approval by the US Congress of a landmark reform program that shifted more voting power to emerging markets and expanded the IMF’s lending resources.

But Lagarde faces one potential complication — a French court in December ordered her to face trial for negligence over her role in a payout of some 400 million euros to businessman Bernard Tapie when she served as France’s finance minister.

Lagarde has vowed to appeal the trial order and has said she acted in the best interests of the French state and in full compliance with the law. The IMF board has reaffirmed its confidence in Lagarde’s ability to effectively carry out her duties.

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