Acting head confident will select effective new chief

Selection of a new leader of the International Monetary Fund should be made on the basis of merit, and it would not be unusual if it takes some time, acting Managing Director John Lipsky said Thursday.

"There's been agreement among our membership that the process of selection of the managing director should be open, transparent and merit-based," he said after addressing the Peterson Institute.

"Hopefully, open means open. Hopefully, open doesn't mean open to some," he said when asked about the process of picking a successor to Dominique Strauss-Kahn, who resigned as he faces charges in New York of sexual assault and attempting to rape a hotel maid.

Lipsky, who became acting managing director after Strauss-Kahn's arrest last Saturday, said later that French Finance Minister Christine Lagarde -- seen by many as a front runner -- was one of many well-qualified candidates.

U.S., which is the single largest shareholder in the International Monetary Fund, is not supporting the call by developing countries to break from the six-decade tradition of appointing a European to lead the fund.

Nearly seven decades, a handful of powerful, mostly Western countries quietly chose the leader of the International Monetary Fund.

Not this time.

The 187-nation body, which directs billions in aid to financially troubled nations, is in the spotlight as never before. Its former leader, Dominique Strauss-Kahn, resigned in disgrace late Wednesday to fight allegations that he sexually assaulted a hotel maid.

Now, in choosing his successor, the IMF faces cross-pressures.

Under a gentleman's agreement dating to just before World War II, a European has run the IMF and an American has led the World Bank, its sister organization. Together, the United States and Europe control more than 50 percent of the IMF's votes and so can shape its policies.

Developing countries object to this arrangement as out of step with global economic realities. European countries are mired in debt. By contrast, China and other developing nations are building surpluses and growing much faster than the West. And they've increased their contributions to the IMF.

The former investment banker said he regrets the circumstances that have made it necessary for him to serve as the fund's acting head, but stressed that the Washington-based financial agency remains fully functioning and operational up to date.

"The dean of the IMF Executive Board is initiating contacts with his colleagues today about the selection process for the managing director," William Murray, an IMF spokesman, said Thursday in a short statement.

The IMF's 24-member Executive Board is responsible for selecting the managing director. Past practice has been that an executive director may submit a nomination for the position. When more than one candidate is nominated, the Executive Board aims to reach a decision by consensus.

The IMF has had 10 managing directors since it began operations in 1947. The position of managing director is currently vacant, following the resignation of Dominique Strauss-Kahn over a sex scandal Wednesday.