Friday, June 24, 2011

IMF should reflect "changing world": Lagarde

Source: CCTV

WASHINGTON, June 23 (Xinhua) -- The International Monetary Fund (IMF) needs to continue to improve its legitimacy and effectiveness and reflect the changing world, said Christine Lagarde, front-runner for the IMF top position on Thursday.

"I firmly believe that the legitimacy and effectiveness of the Fund cannot be taken for granted; they must be continuously proved, and improved, whenever possible or necessary," said Lagarde in a statement to the IMF Executive Board.

"Should you entrust me with the challenging task of Managing Director, I would strive, over the next five years, to build a Fund that would be adapted to a changing world," the French finance minister said.

She noted that the IMF has learnt a great deal from the recent financial crisis and definitely changed for the better, successfully repositioning itself at the center of the global economic and financial system.

However, the 187-member international financial institution needs to continue its shift towards responsive, even-handed and balanced actions in support of global economic and financial stability and to better serve the whole membership, she said.

From 2008 to 2010, the IMF was committed to shifting quotas from advanced economies to dynamic emerging markets and developing countries. But part of the commitment has not yet materialized, she added.

Lagarde, former head of an international law firm, emphasized some key principles that the IMF needs to focus over the next five years, including increasing its relevance, responsiveness and legitimacy.

"Legitimacy is a precondition to the acceptance of any reform. One obvious prerequisite is to implement promptly the historic governance reform that was agreed last year. France has shown leadership in this respect. More broadly, if elected, I would be committed to continuously adapting the representation of the Fund, in particular quotas, to changing economic realities," she said.

She also noted that the IMF needs to develop sufficient resources and adequate tools to support member countries. It also needs to create a more diversified environment, she said

The IMF began interviews Monday with candidates running for its managing director.

Agustin Carstens, Mexico's central bank governor who is also contesting the IMF's top job, met the IMF board earlier this week.

Carstens also stressed the need to deepen the IMF's governance reform to improve its legitimacy and effectiveness.

The IMF started the process to select its new chief in late May to succeed former Managing Director Dominique Strauss-Kahn, who resigned on May 18 to face sexual assault charges in New York.

Carstens and Lagarde made the IMF's shortlist of candidates on June 13.

The IMF board is scheduled to meet on early next week to discuss the strengths of each candidate, with the aim to complete the selection process by June 30, said the IMF on Thursday.

"Although the Board may select a Managing Director by a majority of the votes cast, the Board's objective is to select the Managing Director by consensus in a formal meeting," the IMF board said in a statement.

Lagarde also met U.S. Treasury Secretary Tim Geithner on Thursday.

"The Secretary believes that Minister Lagarde's strong leadership skills and experience makes her an exceptionally talented candidate for IMF managing director," said the U.S. Treasury Department in a statement.

The department noted that the U.S. has not yet endorsed a candidate.

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