Lagarde Set Own Style In IMF

 

WASHINGChristine Lagarde has made two bold decisions, since she is in charge in International Monetary Fund.

In a swift one-two punch, she confronted both European bankers and the region's political leaders and demanding more aggressive action to prevent the euro-zone debt crisis from spilling beyond Greece Portugal and Ireland.

She declared publicly that European banks faced huge exposure to souring sovereign debts and needed more capital which angered Europe's leadership; But also forced them to confront what had only been whispered in private machinery.

Her frankness in speaking uncomfortable truths is putting a distinct stamp on her leadership.

IMF insiders, speaking through a weekend of talks among global finance officials, said Lagarde's candor and clarity are no different in private meetings with government ministers. It is proving important in forcing officials to move faster in finding solutions at a critical turning point for Europe and the world economy.

This contrasts sharply with her predecessor Dominique Strauss-Kahn who resigned suddenly on May 18 after he was charged with sexually assaulting a hotel maid in New York.

Charges against him were dismissed in August after court prosecutors lost faith in his accuser's credibility.

Persuasive and charismatic in private, Strauss-Kahn was verbose and opaque in public. His grasp of economic issues was immense but his style was one of a political operator, pulling strings within the complex international machinery to push his own objectives.

The 55-year-old Lagarde's contrasting approach was bearing fruit by the end of the IMF and World Bank meetings in Washington this weekend.

While many European finance ministers and central bankers may still see Europe's problems largely as a domestic issue, they have stepped up their efforts to find ways of stabilizing the euro zone and recapitalizing its banks.

While Lombardi believes U.S. Treasury Secretary Timothy Geithner is the weekend's winner for keeping up pressure on Europe by recommending ways to rescue their banks, he said Lagarde was able to build on that to push for decisive action.

Lagarde believes her role should be to bridge divisions among nations where the path forward seems almost impossible to find. This approach was evident in her public remarks at the IMF sessions. She combined candor and pragmatism as she tried to narrow differences among countries over steps needed to tackle the crisis.