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Washington - Christine Lagarde, the International Monetary Fund’s (IMF) new chief, pledged on Wednesday to push ahead with reforms to give fast-growing emerging markets greater sway at the global lender.
At a news conference on her second day as IMF managing director, Lagarde acknowledged an array of immediate issues confronting the Fund, including Europe’s debt crisis, but she also said she was focused on the need for the IMF to change with the times.
Institutions like the IMF must better reflect the shifting balance of power in the global economy, she said, adding the idea of creating a top-ranking post at the IMF to give a higher profile to emerging markets was “not a bad idea.”
“The world is going to continue to change,” she said. “We have these tectonic plates that are moving at the moment, and that needs to be reflected in the composition of governance and employment at the Fund.”
Lagarde won the top spot at the IMF after her predecessor, Dominique Strauss-Kahn, resigned in May to face charges of sexual assault against a hotel maid in New York. Strauss-Kahn has denied the charges and the case appears to be unraveling over questions about the credibility of his accuser.
She declined to comment on Strauss-Kahn’s situation despite repeated questions.
Questioning was occasionally tough at the heavily attended event, partly because of the drama surrounding her accession to the IMF leadership. Some emerging markets wanted the job to go to one of their members rather than carrying on a tradition of having a European head the global lender.
Lagarde, a former French finance minister who has training as a corporate lawyer but not an economist, was asked directly whether she was qualified to hold the job, which among other things involves deciding the disbursement of tens of billions of dollars to needy countries.
“I’m not going to brag about my qualifications or lack of qualifications. I think the truth of the pudding is in the eating as you say,” Lagarde said. “We’ll see how it goes.”
Reform agenda
She said IMF member nations needed to complete reforms agreed to in 2010 to give developing countries more power within the institution.
“But that should also reflect in our employment policies, in our training policies, in the way in which we build teams, in the way in which we organise recruitment so that people are not clones of each other,” Lagarde said.
Lagarde acknowledged that among the most pressing issues she faces is dealing with a European debt crisis that has required bailouts for Ireland, Portugal and Greece. She confirmed that the IMF board would meet on Friday to consider a disbursement of funds for Greece.
She said another sensitive issue was how to deal with surging capital flows into emerging markets that were creating the risk of asset bubbles and disrupting foreign exchange markets.
While noting the global recovery was unbalanced, she tried to sound a note of reassurance that it was firmly in place.
“When we look at our growth forecasts for 2011, 2012, we are clearly on the rebound and things are improving and are getting better when compared with the situation as it was in 2009 at the height of the crisis,” Lagarde said.
At a news conference on her second day as IMF managing director, Lagarde acknowledged an array of immediate issues confronting the Fund, including Europe’s debt crisis, but she also said she was focused on the need for the IMF to change with the times.
Institutions like the IMF must better reflect the shifting balance of power in the global economy, she said, adding the idea of creating a top-ranking post at the IMF to give a higher profile to emerging markets was “not a bad idea.”
“The world is going to continue to change,” she said. “We have these tectonic plates that are moving at the moment, and that needs to be reflected in the composition of governance and employment at the Fund.”
Lagarde won the top spot at the IMF after her predecessor, Dominique Strauss-Kahn, resigned in May to face charges of sexual assault against a hotel maid in New York. Strauss-Kahn has denied the charges and the case appears to be unraveling over questions about the credibility of his accuser.
She declined to comment on Strauss-Kahn’s situation despite repeated questions.
Questioning was occasionally tough at the heavily attended event, partly because of the drama surrounding her accession to the IMF leadership. Some emerging markets wanted the job to go to one of their members rather than carrying on a tradition of having a European head the global lender.
Lagarde, a former French finance minister who has training as a corporate lawyer but not an economist, was asked directly whether she was qualified to hold the job, which among other things involves deciding the disbursement of tens of billions of dollars to needy countries.
“I’m not going to brag about my qualifications or lack of qualifications. I think the truth of the pudding is in the eating as you say,” Lagarde said. “We’ll see how it goes.”
Reform agenda
She said IMF member nations needed to complete reforms agreed to in 2010 to give developing countries more power within the institution.
“But that should also reflect in our employment policies, in our training policies, in the way in which we build teams, in the way in which we organise recruitment so that people are not clones of each other,” Lagarde said.
Lagarde acknowledged that among the most pressing issues she faces is dealing with a European debt crisis that has required bailouts for Ireland, Portugal and Greece. She confirmed that the IMF board would meet on Friday to consider a disbursement of funds for Greece.
She said another sensitive issue was how to deal with surging capital flows into emerging markets that were creating the risk of asset bubbles and disrupting foreign exchange markets.
While noting the global recovery was unbalanced, she tried to sound a note of reassurance that it was firmly in place.
“When we look at our growth forecasts for 2011, 2012, we are clearly on the rebound and things are improving and are getting better when compared with the situation as it was in 2009 at the height of the crisis,” Lagarde said.
