French Finance Minister Christine Lagarde, 55, was confirmed Tuesday to become the first woman to lead the International Monetary Fund. The announcement came after the U.S. and Russia pledged support for her campaign, a day after China gave its blessing.
The open position to lead the IMF came in May after the scandal of former managing director Dominque Strass-Khan ended in his resignation (See: Sex Scandal Stuns IMF and Throws Bailouts Into Question).
Zanny Minton Beddoes, economics editor for The Economist, is confident in Lagarde's ability to lead the IMF. However, she and The Economist do not believe Lagarde is necessarily the right person for the job for two main reasons:
1) It was time for someone from an emerging market to lead the global organization.
2) But more importantly, Lagarde has a conflict of interest of sorts with having dealt so "integrally" with the European bailouts of the last couple of years.
"The [most] important challenge she will have to deal with very early on is to show that she does have a new job now, that she is no longer part of the European response to Greece, but that she is the head of the IMF and has the interests of the IMF and the international community at heart," Minton Beddoes tells Aaron in the accompanying interview taped before the official announcement. (See: "Huge Uncertainty" Over Greece: "People Would Be Nuts Not to Have a 'Plan B,'" Minton Beddoes Says)
But why should you care about the IMF anyway?
"You should care because the IMF is the most important global financial institution…. Global capital markets are globalziing fast [and] the world economy is now very very important for the U.S. economy…the IMF plays a big role in that," says Minton Beddoes, a former IMF economist. "If you have a vibrant, effective IMF, then the world as a whole is better off."