August 11, 2022

Chief of Israel’s Central Bank in Bid to Lead I.M.F.

Ms. Lagarde, the French finance minister, told her Saudi Arabian counterpart earlier in the day that tackling sovereign debt troubles would be a priority of the I.M.F. if she led the organization.

Mr. Fischer, also competing with Agustin Carstens, the chief of Mexico’s central bank, had said the I.M.F. post was one of the best jobs in the international financial system but was noncommittal on a bid until Saturday.

“There arose an extraordinary and unplanned opportunity — perhaps one that will never happen again — to compete for the head of the I.M.F., which after much deliberation I decided I wish to follow through on,” Mr. Fischer said in a statement.

Yuval Steinitz, Israel’s finance minister and representative at the I.M.F., said he would support and aid Mr. Fischer’s candidacy.

The job has been vacated by Dominique Strauss-Kahn of France, who resigned after his arrest on May 14 on charges of attempted rape.

Mr. Fischer, 67, would be a significant contender to Ms. Lagarde. But the I.M.F. would have to change its rules that no one should be appointed to the post over the age of 65 and that no one should hold the post beyond the age of 70.

Mr. Fischer, a former deputy managing director of the I.M.F. and former vice chairman of Citigroup, was born in what is now Zambia but holds Israeli citizenship, which could pose a problem for Arab countries.

“I believe I can contribute to the I.M.F., the central entity of the global economy, and contribute to the global economy after the crisis,” he said.

The economist Nouriel Roubini said Mr. Fischer had the qualifications to run the I.M.F. but would not be able to knock Ms. Lagarde off course.

“Stan Fischer would make an excellent I.M.F. managing director. But, at this late stage, he does not have enough support to succeed,” Mr. Roubini, co-founder of Roubini Global Economics, said in an e-mail.

Mohamed El-Erian, co-chief investment officer at the world’s largest bond fund company, Pimco, said Mr. Fischer would be a popular choice within the Fund, having served as its No. 2.

“He is extremely well liked by the staff of the I.M.F., well known and genuinely respected by the member countries of the institution,” Mr. El-Erian said.

Ms. Lagarde was in Saudi Arabia on Saturday as part of a world tour to drum up support among emerging market economies.

“There are specific issues to deal with and clearly some of the sovereign debt crisis issues are one of the priorities at the moment,” Ms. Lagarde said on the sidelines of a meeting with Ibrahim Alassaf, the Saudi finance minister, in Jeddah.

“I will certainly look at one of the purposes of the fund, which is to restore stability.”

Ms. Lagarde is backed by the European Union and a handful of smaller countries. Paris is hopeful that Washington and Beijing will also stand behind her.

Mr. Fischer, though, is popular in the United States and was the thesis adviser to Ben S. Bernanke, now the Federal Reserve chairman.

Brazil, the biggest economy in Latin America, is leaning toward supporting Ms. Lagarde but has not yet made up its mind, officials said Friday.

A Reuters poll of economists, published in May, found 32 of 56 saw Ms. Lagarde as the favorite, although Mr. Fischer won the most votes as “best suited” for the job.

Mr. Fischer, who just started his second year of a second five-year term as Israel’s central bank chief, has been widely credited with helping Israel’s economy weather the global financial crisis by starting to lower Israeli interest rates sharply in 2008. He has since raised rates 10 times to contain inflation.

One potential pitfall for Ms. Lagarde is a legal investigation into her role in a 2008 arbitration payout to a French businessman.

A top French court on Friday put off until July 8 its decision on whether to open a formal inquiry into allegations by opposition left-wing deputies that she abused her authority in approving a 285 million euro payout to a businessman friend of President Nicolas Sarkozy.

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