IMF Leadership in Limbo as Managing Director Faces Criminal Raps

    International Monetary Fund Managing Director Dominique Strauss-Kahn. Photo by: Remy Steinegger / CC BY-SA

    The International Monetary Fund says it “remains fully functioning and operational” even as its managing director faces criminal charges in the United States. But there are some concerns about the future of the fund’s leadership.

    IMF has appointed its No. 2 official, John Lipsky, as acting chief. He was initially slated to head an informal meeting of the IMF executive board on Sunday (May 15).

    The meeting, however, was postponed “pending further developments in New York,” according to the fund’s spokesperson, Reuters reports. 

    Strauss-Kahn was arrested in New York City on Saturday (May 14) for alleged sexual assault of a chambermaid of the hotel he stayed in while in the city. IMF said it “has no comment on the case” and referred all inquiries related to it to Strauss-Kahn’s lawyers.

    There are speculations that Strauss-Kahn may be pressured to resign, possibly shortly after facing a judge in New York, IMF insiders told The Wall Street Journal.

    Lipsky may not be named as Strauss-Kahn’s permanent replacement. He announced last week that he has no plans of seeking another term at the fund after his current one expires in November. IMF has said a search for Lipsky’s replacement is underway.

    “Lipsky’s tenure at the top may last only as long as it takes for a consensus candidate to emerge,” David Bosco of the Foreign Policy’s “The Multilateralist” blog notes, adding that his November exit, however, may be postponed.

    News of Strauss-Kahn’s arrest comes as IMF is expanding its role in bailing out debt-ridden European countries and in addressing the global financial downturn in general. His arrest could weaken the fund’s role in resolving these issues as Strauss-Kahn has been a key proponent of bailouts for European countries.

    The arrest is also expected to affect the course of France’s upcoming presidential election. It has been largely speculated that Strauss-Kahn was eyeing an early exit from IMF to run as French president.

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      Ivy Mungcal

      As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.