Cherie Blair's pregnancy may have knocked Red Ken off the front pages but Chancellor Gordon Brown ea...
Cherie Blair's pregnancy may have knocked Red Ken off the front pages but Chancellor Gordon Brown easily topped that with the intriguing 'leak' that he might be considering the top job at the International Monetary Fund. Ever since Michel Camdessus, IMF incumbent for the past 13 years, announced he was quitting, the horse trading for what is one of the biggest posts in international finance has intensified.
Should we care? Well, now we should. If Brown has decided he has a higher calling, leaving Tony holding the baby ahead of the next election, he has as good a chance as any of being picked. He put down credible policy markers on the international stage some time ago and, crucially, enjoys good relations with the US Treasury which, as the largest contributor to IMF coffers, tends to call the tune. Emerging markets investors should certainly care. The IMF has come under fire from many quarters for poor handling of recent worldwide financial crises, even though its role has undoubtedly become more difficult. Some 85% of the world's population in 50 countries live under IMF-directed economic policy. They don't have much say in it and they don't like it.
It is time for a mega shake-out. Other global institutions are also redefining their roles for the 21st century. That is tricky enough, without the ongoing politicking for positions among international contenders. Traditionally, the leadership of the IMF has come from Europe (more specifically from France), mainly because the US has cornered the World Bank job. The Brits have their own club in the Commonwealth, although Andrew Crockett, a Briton who heads the Bank for International Settlements in Basle (the central banks' central bank) is also a name in the IMF frame. The French are probably out of the running this time. There was that unseemly scrap over who got the European Central Bank job and they lost.
Their finance minister has just resigned ahead of a criminal investigation and while beef has only a remote connection to debt restructuring, it would be odd for a French candidate to be enforcing laws elsewhere when France can't adhere to them at home. Nothing personal, of course, but in the global credibility account the country currently has a small deficit. In other words, what comes around, goes around.
Germany is offering up one Caio Koch-Weser, their deputy finance minister. He has two good things going for him. One is that he is half Brazilian, and if the ranks of developing countries start getting really restive, he would be a useful token representative to point to. (Sadly Armino Fraga, Brazil's own central banker and one-time Soros man, is still occupied at home, and any IMF incomer must hope he keeps doing a fine job there.) The other thing Mr Koch-Weser can boast is chuminess with Larry Summers at the US Treasury.
Then there is Eisuke Sakikabara, Japan's former vice minister of finance for international affairs, a title which did no justice to the power he wielded in office. He too, enjoys the confidence of Larry Summers and is respected internationally as a doer, rather than a talker.
So the contest is still wide open. Emerging market sentiment has softened a little because of it but at least the US has agreed to keep paying its dues and to allow the Fund to sell some of its 100 million ounces of gold reserves (at $47/ounce) to tackle debt relief. Russian investors, particularly, will be relieved. But the winds of change are blowing round the IMF. Take cover.
Went into administration April 2018
Threat of legal action looms over Woodford IM
View from the front row
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