It won’t surprise anyone who has been following the scandal surrounding former International Monetary Fund head Dominique Strauss-Kahn, who resigned in disgrace after being arrested on charges of attempted rape, that the newly appointed IMF head is a woman. The newly minted IMF head, Christine Lagarde, will step into the powerful position and immediately face the challenge of Greece’s worsening economic crisis, which is threatening the euro and financial markets worldwide.
Interestingly, Lagarde does not have a degree in economics, but she says that she’s made up for that with experience, which is certainly plausible given her stellar professional history. A member of French President Nicolas Sarkozy’s cabinet since 2007, she lived for many years in the United States and is sometimes referred to as “the American” for her attempts to reform French work culture.
According to NPR, over the past four years, “Lagarde led her country through the financial crisis, implementation of austerity measures and its chairmanship of the G-20 countries. She also corralled European support for the initial bailout of Greece.”
Countries with emerging markets struggled to wrest leadership of the IMF from Europe, which is understandable, given that every IMF head since the fund’s inception has been European. But Lagarde, during her campaign for the position, argued that a European was necessary to deal with the crisis in Greece. Another worry, however, is that because French banks have the largest exposure to Greece of the European countries, that Lagarde might not be objective in her dealings with Greece’s financial situation.
But, according to the New York Times, a source who is close to Lagarde but was not authorized to speak on the matter said that as her position changed, this would not be an issue. ”Before, she was representing one country,” said the person. “She will now be wearing a different hat, which would free her from certain constraints, and allow her to have a more sound approach.”
Of course, gender has come into play in discussions of Lagarde’s ability to lead. She has been described as a superb political negotiator, and others say that she manages to be at once “politically forceful but personally charming and likable,” walking the fine line that requires women in business and politics to be aggressive but also pleasant. Lagarde says that her gender is an asset in the world of finance. ”I think we inject less libido,” she said during an interview last fall. ”And less testosterone into the equation. … It helps in the sense that we don’t necessarily project our egos into cutting a deal.”
While some may disagree with her assessments that women negotiate or operate more generally within the world of finance (surely, if this is true that women think less about their egos, could it be the result of the finance world’s social norms, not an innate female characteristic), it’s exciting to see a woman stepping into such a powerful position. Now the question is how Lagarde will deal with the unfolding crisis on her own continent.
Photo from the World Economic Forum’s Flickr photostream.