Political Risk Latin America Blog @PolRiskLatam

Chile’s central banker: DSK must go, now, and be replaced on merit

Posted in News and Articles, Political Risk by politicalrisklatam on May 20, 2011

by Jude Webber for Financial Times, Beyond Brics, May 18th, 2011.

Dominique Strauss-Kahn must go. Now. That is the view of José De Gregorio, Chile’s central bank president and both a governor of the IMF and a member of the lender’s 24-member advisory body, the International Monetary and Financial Committee.

In an interview with the FT, De Gregorio rubbished the idea that Strauss-Kahn’s replacement must be a European. “One could argue that you have to be very careful of conflicts of interest with a European running the institution,” he said, adding that the sole criterion should be who is the most competent person for the job.

“I think Dominique Strauss-Kahn must fully focus on his defence at this stage and that is incompatible with devoting all his time and efforts to running the fund at a very crucial time in the world economy,” De Gregorio said. “I think he should resign.”

De Gregorio’s comments, made during a long-planned interview about the Chilean economy, echoed those of Tim Geithner, the US Treasury secretary. But splits are emerging over who should succeed the debonair Frenchman who has been hailed as a brilliant economist and savvy IMF leader but whose career now looks to be in ruins, whatever the outcome of his court case.

The DSK affair has cast into the spotlight the gentleman’s pact – seen as an imperial hangover by some – that has traditionally carved up the top jobs at the IMF and World Bank between Europe and the US. Emerging market candidates are now harder to overlook, as this Bloomberg story highlights. (continue reading… )

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