Wednesday, June 15, 2011

Carstens questions European leading the IMF (AP)

WASHINGTON ? Mexican central banker Agustin Carstens said Monday that the next leader of the International Monetary Fund should not be European because those nations are borrowing heavily from the lending organization.

Carstens pressed his long-shot candidacy to head the IMF during a speech at the Peterson Institute for International Economics, a Washington think tank.

European officials have closed ranks behind French Finance Minister Christine Lagarde, who has emerged as the front-runner.

Lagarde's candidacy would create "conflicts of interest," Carsten said, because Greece, Ireland and Portugal are borrowing heavily from the Fund.

"We could have a situation where the borrowers dominate the institution," he told an audience of more than 100 policymakers and economists. He also met with Treasury Secretary Timothy Geithner earlier in the day, but said Geithner did not endorse his candidacy.

Carstens is unlikely to pose a serious challenge to Lagarde. A European has traditionally headed the IMF. Lagarde consolidated her lead over the weekend by receiving endorsements from Indonesia and Egypt, a sign that her support extends beyond Europe.

Carsten acknowledged the steep challenge he faces. But he said it was important for developing countries to have a choice in the election. The speech and a meeting with Geithner would also help him build name recognition, should he seek another top position in the future.

Stanley Fischer, an Israeli central banker, also is vying for the job to lead the IMF. He declared his candidacy on Saturday.

Source: http://us.rd.yahoo.com/dailynews/rss/world/*http%3A//news.yahoo.com/s/ap/20110613/ap_on_bi_ge/us_imf_future

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