Two Candidates Remain on IMF Shortlist

On Monday, the International Monetary Fund’s (IMF) board blocked Stanley Fischer, Bank of Israel Governor, from the running to become managing director of the IMF, leaving the last two candidates.

Christine Lagarde, French Finance Minister, and Agustin Carstens, Governer of the Bank of Mexico, are now the last two candidates being considered for the role. The role has been available since the resignation of the former head of the IMF, Dominique Strauss-Kahn.

Mr Fischer, highly respected in both advanced and emerging economies, was unable to run for the position, as, at the age of 67, he exceeded the age limit for an incoming managing director, which stands at 65.

The IMF board rejected changing the rules to allow him to run, saying that that this would mean reopening the selection process to candidates older than 65.

A statement from the IMF board confirmed that they had shortlisted Ms Lagarde and Mr Carstens.

It said: "The executive board will meet with the candidates in Washington and, thereafter, meet to discuss the strengths of the candidates and make a selection."

The final selection will be made by June 30.

Christine Lagarde: First Female Head of IMF?

Ms Lagarde is the current front-runner, who, if she wins, would become the first woman to head the IMF.

Ms Lagarde is backed by Europe, which holds a third of the votes, as well as Indonesia, amongst other countries.

Mr Carstens is supported by many Latin American countries, but Brazil, the region’s largest economy, has not yet said who it is backing.

Also to decide is the US, whose Treasury Department has said that it has not yet endorsed a candidate.

The US has 17% of the vote, meaning that its backing will be key in deciding the new head of the IMF.

By tradition, the US has always supported European candidates, and it is thought that this occasion will be no exception.

Ms Lagarde will be interviewed by the IMF board, which is heavily represented by European countries.

Mr Carstens acknowledged himself as the underdog, saying that the chances of Ms Lagarde being offered the position were “quite high”.

“I'm not fooling myself,” he said, after a meeting with US Treasury Secretary, Timothy Geithner: “It's like starting a soccer game with a 5-0 score.”

He said to the Peterson Institute, a Washington Policy thinktank: “I think in the case of Europe, what would help me is to have a fresher pair of eyes ... I think also someone coming from the outside would speak their mind more frankly and I think that would be an advantage.”

By Millie Schurch

[Image courtesy of World Economic Forum]