Susan Walsh/Associated PressNew Director Christine Lagarde says the International Monetary Fund's governance "must be adjusted to reflect the new architecture of the world."
Christine Lagarde is the first woman to lead the IMF. She takes over after her predecessor, Dominique Strauss-Kahn, who resigned in May to fight charges that he sexually assaulted a New York City hotel housekeeper.
Lagarde is under pressure to address the institution's long-standing reputation as a melting pot of Western elites - one that was known for male-dominated clubbiness.
She said she will push to make the institution's staff more diverse. She also said she will continue reforms begun last year that increase the voting power of countries like China and Brazil.
"The value of diversity is top on my list of priorities," Lagarde said Wednesday in her first news conference since assuming the job. "It's not just gender diversity. It's about culture. It's about academic background."
The former French finance minister is facing many immediate challenges.
Lagarde is the 11th European to run the IMF. She must convince the developing world she will make the institution a more open place for non-Western nations. At the same time, she'll have to persuade her fellow Europeans to take painful steps to avoid a default by Greece.
Europe controls about 32 percent of the votes on the board, and the United States maintains nearly 17 percent. China, the world's second-largest economy after the United States, has about 4 percent of the votes.
Last year, the IMF began steps to shift more power to developing countries.
Under those measures, China would see its voting share increase to 6 percent. Europe would give up two seats on the 24-member board. The changes still must be approved by individual nations.
"(The IMF's governance) must be adjusted to reflect the new architecture of the world," Lagarde said. "That should also reflect in our employment policies and our training policies. And ... in the way in which we organize recruitment so that people are not clones of each other."
Lagarde deferred most questions about the Greek debt crisis. She said the IMF's executive board will meet Friday to decide whether to release more financial assistance to that country.
But when asked what issue most worries her, she cited government debt and emphasized that it isn't just a problem for Europe. The United States and Japan are also under pressure to reduce debt, she said.
Lagarde has said that her first priority is to unify the IMF's staff of 2,500 employees and 800 economists and restore their confidence in the organization.
Strauss-Kahn has been freed from jail, and the case against him has weakened. Prosecutors acknowledge that the hotel maid who accused him of attacking her has lied about many aspects of her background.
But Strauss-Kahn faces a new criminal complaint in France. A novelist has accused him of attempting to rape her eight years ago. Strauss-Kahn's lawyers have called the allegations "imaginary."
The 187-member IMF lends money to countries with troubled finances and provides economic advice to world leaders.
It has grown significantly in stature and importance since the 2008 financial crisis, when the world's major economies turned to it for help in dealing with the fallout. The IMF has $395 billion available to lend and has lending programs in place in 26 countries.
Lagarde will be paid $467,940 per year, after taxes, according to her contract with the IMF. She also will receive $83,760 to allow her to "maintain, in the interests of the fund, a scale of living appropriate to your position."
The contract also states that Lagarde is "expected to observe the highest standards of ethical conduct" and "shall strive to avoid even the appearance of impropriety in your conduct." Lagarde will undergo ethical training, the contract states. Strauss-Kahn's contract did not include similar language.
by Christopher S. Rugaber Associated Press Jul. 7, 2011 12:00 AM
New IMF chief vows to empower developing nations
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