IMF chief names deputies

CHRISTINE Lagarde, the new head of the International Monetary Fund, has named a US official as her chief deputy and, in a move that reflects China's rising influence, added a Chinese official to the ranks of her senior advisers.

By InvestSMART · 14 Jul 2011

By InvestSMART ·
14 Jul 2011

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David Lipton, a White House economic adviser, will become the fund's senior deputy managing director in September, after the previously announced retirement of John Lipsky.

The US, which owns a controlling share of the fund, maintained its historic insistence that an American should fill the post, just as a European has always headed it.

But Ms Lagarde also bowed to the future by naming a Chinese economist, Zhu Min, to a newly created position as the fourth deputy managing director.

Mr Zhu's elevation follows a campaign promise by Ms Lagarde to increase the role of China and other emerging economies in managing the fund. The other two deputy directors, who will remain in place, come from Egypt and Japan.

"These appointments are part of a grand bargain that allowed Europe to retain its hold on the top job," said Eswar Prasad, a professor of trade policy at Cornell University who worked at the fund for 17 years. "This may be one of the few instances where the three largest economic powers China, Europe and the US found their short-term interests closely aligned."

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Frequently Asked Questions about this Article…

What IMF leadership changes did Christine Lagarde announce?

Christine Lagarde named David Lipton, a White House economic adviser, as the IMF's senior deputy managing director and added Chinese economist Zhu Min as a newly created fourth deputy managing director. The other two deputy directors from Egypt and Japan will remain in place.

Who is David Lipton and when will he take up the IMF senior deputy managing director role?

David Lipton is a White House economic adviser who will become the International Monetary Fund's senior deputy managing director in September, following the previously announced retirement of John Lipsky.

Why did the United States insist on an American holding the IMF senior deputy post?

The article notes the US maintains a historic insistence on an American filling that post because the United States owns a controlling share of the IMF, continuing a longstanding practice linked to governance arrangements at the fund.

Who is Zhu Min and why is his appointment significant for investors watching the IMF?

Zhu Min is a Chinese economist appointed to a newly created fourth deputy managing director role. His elevation reflects China's rising influence at the IMF and Christine Lagarde's campaign promise to increase the role of China and other emerging economies in managing the fund.

What does the appointment of a Chinese deputy say about China's influence at the IMF?

The appointment signals growing Chinese influence at the IMF. The article describes Zhu Min's elevation as reflecting China's rising role and as part of Lagarde's effort to give emerging economies more say in the fund's management.

Will the existing IMF deputy directors be replaced?

No. According to the article, the two existing deputy directors from Egypt and Japan will remain in place alongside the newly named deputies.

Why was a fourth deputy managing director position created at the IMF?

The fourth deputy role was created as part of Christine Lagarde's pledge to increase the participation of China and other emerging economies in the IMF's management, and she filled that new post by appointing Zhu Min.

How have experts reacted to Lagarde’s appointments at the IMF?

Eswar Prasad, a Cornell trade policy professor who previously worked at the IMF, described the appointments as part of a 'grand bargain' that allowed Europe to retain the top job while aligning the short-term interests of the three largest economic powers—China, Europe and the US.