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IMF’s Lipton, Grasso Exit as Georgieva Shakes Up Leadership

Jeff Kearns

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The International Monetary Fund’s top deputy, David Lipton, will depart after nine years, handing President Donald Trump a chance to install an ally at the head of the institution.

Lipton and another senior official are leaving in the first significant shakeup of the leadership team by Managing Director Kristalina Georgieva, who took office in October. Lipton, the IMF’s longest-serving first deputy managing director, and Carla Grasso, who is chief administrative officer and deputy managing director, will depart at the end of February, the fund said Friday in Washington.

Lipton’s exit as the No. 2 official comes four months after Georgieva, a Bulgarian economist who previously served as World Bank chief executive, secured the top job at the fund, succeeding Christine Lagarde after she was selected to lead the European Central Bank. Georgieva’s transitions come “in the context of changes she will be making to the leadership team,” the IMF said in its statements announcing the departures.

The transitions come as global policy makers face an unprecedented threat from the virus outbreak in China that has paralyzed large swaths of the world’s second-largest economy, plus a lackluster global expansion and continuing uncertainty surrounding trade policy. The IMF is also working to stabilize Argentina and other faltering economies among its 189 members.

Read more: IMF Trims Global Growth Outlook But Tones Down Risk Warnings

The U.S.’s role as the IMF’s biggest shareholder gives the White House considerable sway over the appointment, as does tradition. Since its founding in 1945, the fund has been run by a European as part of an unwritten understanding that means an American leads the World Bank. That arrangement lived on in April when former U.S. Treasury official David Malpass became president of the World Bank, placing a Trump loyalist at the helm of the lender.

Lipton oversees strategy, policy development, surveillance and lending. He worked at the IMF early in his career before going to Wall Street, then served as special assistant to President Barack Obama. Lagarde chose Lipton, who also served as a U.S. Treasury Department official in the Clinton administration, as her top deputy shortly after she assumed the role in 2011.

Grasso, a dual national of Brazil and Italy, oversees the IMF’s budget, human resources, technology and audits. She joined the fund in 2015 after serving as a human resources executive at the mining company Vale SA.

In another staffing change at the two Washington-based institutions, World Bank chief economist Penny Goldberg this week announced plans to step down on March 1 to return to her job as an economics professor at Yale University. Goldberg also told staff on Monday that Simeon Djankov, who was the director of development economics, resigned effective Jan. 31, according to an email seen by Bloomberg News.

(Updates with Simeon Djankov resignation in final paragraph.)

--With assistance from Eric Martin.

To contact the reporter on this story: Jeff Kearns in Washington at jkearns3@bloomberg.net

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Ana Monteiro

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