A Favorite Emerges for Helm of IMF

The French finance minister, Christine Lagarde, was on a panel at the World Economic Forum in Davos this January when her usual smile turned into a frown. Next to her, Robert E. Diamond Jr., chief executive of Barclays and one of the most powerful bankers in the world, thanked regulators and finance ministers for their role in shaping a better environment after the financial crisis.

Gerard Julien | AFP | Getty Images French Economy Minister Christine Lagarde

Ms.Lagarde looked him in the eye. “The best way for the banking sector to say thank you would be to actually have, you know, good financing of the economy, sensible compensation systems in place and reinforcement of their capital,” she replied, to a burst of applause.

Her straight talk has helped burnish Ms. Lagarde’s reputation as one of Europe’s most influential ambassadors in the world of international finance.

And now it is helping to make Ms. Lagarde, 55, perhaps the leading candidate to succeed her friend and colleague Dominique Strauss-Kahn as head of the International Monetary Fund. The process of selecting a new managing director may speed up now that Mr. Strauss-Kahn has resigned his post as the I.M.F.’s managing director to deal with charges of attempted rape, stemming from his encounter with a hotel maid in New York last Saturday.

Another of Ms. Lagarde’s selling points, though, may be one not listed on her résumé. “What’s happened with Strauss-Kahn underscores how great it would be to have a woman in the role,” said Kenneth S. Rogoff, a former I.M.F. chief economist who is now a professor at Harvard University. If she gets the post, Ms. Lagarde would be the first woman to run the I.M.F. — or any large international financial institution, for that matter.

But Mr. Rogoff indicated gender was only part of her appeal. “She is enormously impressive, politically astute and a strong personality,” he said.

“At finance meetings all over the world, she is treated practically like a rock star.” European officials are frantically maneuvering to keep one of their own in a post Europe has controlled since the I.M.F. and the World Bank were created in the late 1940s.

It will not necessarily be easy. Three years after financial excesses in the United States and Europe brought the world economy to the brink of catastrophe, Mr. Strauss-Kahn has become the latest symbol of what many see as the faults of the wealthy West.

Appointing simply another European, particularly another white middle-age male, might not fly this time. The world’s fast-growing emerging economies say they should now get a shot at running a big institution like the I.M.F. — or the World Bank, traditionally headed by an American in a long-standing understanding between the two economic powers.

But with Europe facing a drawn-out financial crisis of its own, global leaders may consider it politic for a European to finish serving out Mr. Strauss-Kahn’s term, which ends in 2012.

That might then create an opening for a leader from one of the emerging markets — from South Africa or India, for example — whose collective economic heft and effect on global markets is starting to eclipse that of the West.

That is why Ms. Lagarde is seen as Europe’s lifeline. Her main competition,, analysts say, is another policy maker with an alternate profile, Kemal Dervis, a former finance minister of Turkey. Mr. Dervis is credited with rescuing the Turkish economy after it was hit by a devastating financial crisis in 2001, in part by securing a multibillion-dollar loan from the I.M.F.

Before that, Mr. Dervis worked at the World Bank for 24 years. But with the I.M.F. overseeing 100 billion euros (around $140 billion) in loans to Greece, Portugal and Ireland, Ms. Lagarde may be the best person to steer a transition at the I.M.F., analysts says, even if President Nicolas Sarkozy of France has not yet moved to put her in the running.