Christine Lagarde, the new managing director of the International Monetary Fund, holds her first news conference Wednesday at the IMF in Washington.
ASSOCIATED PRESS Enlarge
WASHINGTON — The new chief of the International Monetary Fund pledged Wednesday to diversify the global lending organization and give developing nations a greater voice on its board.
Christine Lagarde is the first woman to lead the IMF. She takes over after a sex scandal led her predecessor, Dominique Strauss-Kahn, to resign.
Lagarde is under pressure to address the institution's reputation as a melting pot of mostly Western elites — one that was known for male-dominated clubbiness well before the scandal.
Lagarde said she will push to make the institution's staff more diverse. She said she will also continue reforms begun last year that increase the voting power of countries such as China and Brazil.
"The value of diversity is top on my list of priorities," Lagarde said Wednesday in her first news conference since assuming the top job. "It's not just gender diversity. It's about culture. It's about academic background."
The former French finance minister is facing many immediate challenges.
Lagarde is the 11th European to run the IMF. She must convince the developing world she will make the institution a more open place for non-Western nations. At the same time, she'll have to persuade her fellow Europeans to take painful steps to avoid a default by Greece.
Europe controls about 32 percent of the votes on the board and the United States maintains nearly 17 percent. By contrast, China, the world's second-largest economy, has roughly 4 percent of the votes.
Last year the IMF began steps to shift more power to developing countries.
Under those measures, China would see its voting share increase to 6 percent. Europe would give up two seats on the 24-member board. The changes still must be approved by individual nations.
The IMF's governance "must be adjusted to reflect the new architecture of the world," Lagarde said.
"That should also reflect in our employment policies, and our training policies," she said, "And ... in the way in which we organize recruitment so that people are not clones of each other."
Lagarde deferred most questions about the Greek debt crisis. She said the IMF's executive board will meet Friday to decide whether to release more financial assistance to that country.
But when asked what issue most worries her, she cited government debt and emphasized that it isn't just a problem for Europe. The United States and Japan are also under pressure to reduce debt, she said.
Lagarde has said that her first priority is to unify the IMF's staff of 2,500 employees and 800 economists and restore their confidence in the organization.
Strauss-Kahn resigned in May to fight charges that he sexually assaulted a New York City hotel housekeeper. He has been freed from jail and the case against him has weakened. Prosecutors acknowledge that the hotel maid who accused him of attacking her has lied about many aspects of her background.
But Strauss-Kahn faces a new criminal complaint in France. A novelist has accused him of attempting to rape her eight years ago. Strauss-Kahn's lawyers have called the allegations as "imaginary."
The 187-member IMF loans money to countries with troubled finances and provides economic advice to world leaders.
It has grown significantly in stature and importance since the 2008 financial crisis, when the world's major economies turned to it for help in dealing with the fallout. The IMF has $395 billion available to lend and has lending programs in place in 26 countries.
Lagarde will be paid $467,940 per year, after taxes, according to her contract with the IMF. She will also receive $83,760 to allow her to "maintain, in the interests of the Fund, a scale of living appropriate to your position."
The contract also states that Lagarde is "expected to observe the highest standards of ethical conduct" and "shall strive to avoid even the appearance of impropriety in your conduct." Lagarde will also undergo ethical training, the contract states. Strauss-Kahn's contract did not include similar language.
Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Comments that violate these standards, or our privacy statement or visitor's agreement, are subject to being removed and commenters are subject to being banned. To post comments, you must be a registered user on toledoblade.com. To find out more, please visit the FAQ.