Christine Lagarde strengthens lead for IMF top job

Christine Lagarde strengthened her lead in the race for the IMF’s top job after the institution discarded the candidacy of Bank of Israel Governor Stanley Fischer and rival Agustin Carstens described his chance of winning as “slim”.

The IMF executive board said in a statement late yesterday in Washington that it retained Lagarde and Carstens as the candidates for the post of managing director, excluding Fischer, who exceeds the age limit for the job. Earlier, Carstens had described Lagarde’s chances of being chosen as “quite high”.

The IMF will meet with both candidates in Washington with the aim of making a decision by June 30, a month and a half after the arrest of former chief Dominique Strauss-Kahn on charges including attempted rape. He has pleaded not guilty. A Lagarde win means an extension of the 65-year tradition of a European heading the IMF; Americans have run the World Bank.

“The emerging markets are not happy with the current guarantee that the slot’s going to the European, I suspect this time they will be satisfied to make some noise,” said David Cohen, a Singapore-based economist at Action Economics Ltd, who formerly worked at the US Federal Reserve. “Emerging-market economies are looking towards the future for next time, they are confident the world is definitely evolving in their direction.”

Carstens, Mexico’s central bank governor, yesterday said chances are “quite high” that Lagarde, France’s finance minister, will win. He said that he put his name forward in an effort to help emerging markets get the post in the future.

“I’m not fooling myself,” Carstens said in Washington after meeting with US Treasury Secretary Timothy F Geithner. “It’s like starting a soccer game with a 5-0 score,” given Lagarde’s early front-runner status, he said.