May 20th, 2011
01:40 PM GMT
Urgently required: A senior level politician to chair international organization with a myriad of shareholders from around the globe.
Board members include the U.S., Germany, France, China and Saudi Arabia. Candidate must feel at ease with leaders ranging from Barack Obama to Wen Jiabao and have a wide-range of contacts from Wall Street to Shanghai and all places in between.
The financial crisis of 2008 demands this person would have an intricate knowledge of financial instruments, Basel III banking rules and monetary policy. The ideal candidate is a European that commands the respect of the Chancellor of Germany, embraces the G-20 architecture and has the backing of the President or Prime Minister of your home country. Female candidates are encouraged to apply.
After a whirlwind week of coverage in Brussels which started with the European finance ministers (Ecofin) meeting and finished with the annual European Business Summit, I had dinner with an executive head hunter who has filled posts for Fortune 100 companies and institutions such as the European Investment Bank. Over superb Italian cuisine, we discussed the essential traits of the ideal candidate to fill the seat vacated by former IMF head Dominique Strauss-Kahn. To DSK’s credit, he has elevated the role of Managing Director and the institution. This, in turn, may have made the job of finding the right choice a bit easier.
At the two-day Ecofin gathering, we chased down European finance ministers who did not want to be seen courting the media while at the same time delivering a message that a European is still the right choice for the job.
Their arguments: Collectively “we” are the biggest shareholder and since the EU is in the midst of a financial crisis in Greece, Portugal and Ireland, “we” would feel more comfortable with one of our own. Even the usually reserved President of the European Council Herman Van Rompuy suggested that tradition can be broken, just not yet on stage at the European Business Summit.
He was following a script written by German Chancellor Angela Merkel, who carries the most sway as leader of Europe’s largest economy and which has embraced China for its export lead growth.
The Chancellor came out early to mark her territory and within 24 hours three highly competent names were circulating in the halls of the Ecofin meeting, the most well known being the former President of the German central bank Axel Weber.
That was her opening gambit, but it is worth noting the leading candidate, Christine Lagarde, has superb relations with Mrs. Merkel. It would only enhance the first female Chancellor of Germany to have backed the first female Managing Director of the IMF in Ms. Lagarde. She could be the European candidate of choice and break the practice of a handful of countries fighting for their “flag”.
This executive search could also get done quickly due to the political calendar and the job opening in the IMF’s number two position at the end of August, being vacated by John Lipsky. Over the span of the next week, U.S. President Obama will meet with British Prime Minister David Cameron, the OECD will celebrate its 50th anniversary and G-8 leaders will meet in Deauville, France. Face-to-Face diplomacy certainly speeds up the pace of decision making.
Those who cannot tick all the boxes need not apply
Don’t get me wrong, there will be plenty of horse trading taking place, but none of the major shareholders will attempt to put up a candidate that cannot fill the shoes of the highly intelligent, but perhaps personally careless predecessor.
Finally, while a lot has been said about an emerging market candidate being considered for the top job – and that makes more sense today than ever before – it is plausible to foresee a deal which has the Managing Director’s seat filled by a European with global credentials and superb relations within the G-20.
The First Deputy MD could be the top emerging market candidate that could then lay the ground work for a truly open and merit based process the next time around.
During the global financial crisis the world morphed from a G-8 driven world to the G-20 in the span of months, but the IMF’s largest shareholders are not quite ready to give up all their power just yet.
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