Mexican bank chief seeks support for top IMF job

AP News
Posted: Jun 21, 2011 7:03 PM
Mexican bank chief seeks support for top IMF job

The head of Mexico's central bank says that if he is selected to become the top official at the International Monetary Fund, he will work to increase representation for developing countries and increase the IMF's abilities to deal with financial crises.

Agustin Carstens told the IMF's 24-member executive board on Tuesday that the world's emerging economies needed a bigger voice in IMF decisions.

Carstens and French Finance Minister Christine Lagarde are competing to succeed former IMF Managing Director Dominique Strauss-Kahn, who resigned last month after he was charged with sexually assaulting a New York hotel housekeeper, an allegation he denies. The IMF board is meeting with both candidates this week and hopes to make a final decision by June 30.

"The fund failed profoundly in anticipating the recent financial crisis," Carstens told the board in remarks that were released by the IMF.

He said he would beef up the resources devoted to the IMF job of policing the global economy. He said he wanted to boost the number of staff devoted to surveillance of individual countries and also increase the number of experts on the workings of banks and other financial institutions.

Carstens also promised, "more intense and inquisitive surveillance. The fund should second-guess conventional wisdom and authorities."

Critics have accused the IMF of being asleep at the wheel as global imbalances, such as the subprime mortgage crisis in the United States, built up to dangerous levels.

Carstens also pledged to increase the representation of emerging market countries on the IMF's executive board, the group that is charged with overseeing the day-to-day operations of the fund.

The board was scheduled to hear on Wednesday from Lagarde, who is considered to be the front-runner for the job because she has solid backing from European nations.

After hearing presentations from both Carstens and Lagarde and interviewing them, the IMF's executive board said it planned to meet June 28 to make a selection of a new managing director with the aim of completing that process by June 30.

The United States, the largest shareholder in the IMF, has yet to announce whether it will back Lagarde or Carstens.

Asked about a decision on Tuesday, Treasury Secretary Timothy Geithner called both candidates "very credible" and said the United States wanted to see the race resolved quickly. However, he refused to say whether the Obama administration had decided to back Lagarde.

Geithner, who met with Carstens last week, is expected to meet this week with Lagarde while she is in Washington this week.

In an interview last week, Carstens said that he knows he faces an uphill battle. But he argued that he is the more qualified candidate.

Lagarde is a lawyer by training, while Carstens holds a doctorate in economics from the University of Chicago. He also worked in top jobs at the IMF and served as Mexico's finance minister before taking his current position as head of Mexico's central bank.