Sunday, September 24, 2023

ECONOMY | 10-02-2020 13:43

Lipton, Grasso exit as Georgieva shakes up IMF's leadership

The Fund’s longest-serving first deputy managing director, David Lipton, leaves institution, along with chief administrative officer Carla Grosso, as new chief Kristalina Georgieva makes changes.

The International Monetary Fund’s (IMF) top deputy, David Lipton, will depart after nine years, handing US President Donald Trump a chance to finally install an ally at the head of the institution.

Lipton and another senior official are leaving in the first significant shake-up of the leadership team by Managing Director Kristalina Georgieva, who took office in October. 

Lipton, the IMF’s longest-serving first deputy managing director, and Carla Grasso, who is chief administrative officer and deputy managing director, will depart at the end of February, according to the Fund. 

Georgieva praised Lipton for his work at the Fund, including in beefing up the institution's early warning system to financial trouble.

"David has provided an invaluable service to the Fund’s membership and the global economy more broadly with his outstanding economic experience and expertise," she praised, noting his efforts "to further enhance the rigour of the Fund's analytical work.”

Lipton’s exit as the number two official comes four months after Georgieva, a Bulgarian economist who previously served as World Bank chief executive, secured the top job at the IMF, succeeding Christine Lagarde after she was selected to lead the European Central Bank. 

Georgieva’s transitions come “in the context of changes she will be making to the leadership team,” the IMF said in its statements announcing the departures.

The transitions come as global policy makers face an unprecedented threat from the coronavirus outbreak in China that has paralysed large swaths of the world’s second-largest economy, plus a lacklustre global expansion and continuing uncertainty surrounding trade policy. 

The IMF is also working to stabilise Argentina and other faltering economies, among its 189 members.

Washington's role as the IMF’s biggest shareholder gives the White House considerable sway over the appointment, as does tradition. 

Since its founding in 1945, the fund has been run by a European as part of an unwritten understanding that means an American leads the World Bank. That arrangement lived on in April when former US Treasury official David Malpass became president of the World Bank, placing a Trump loyalist at the helm of the lender.

Lipton oversees strategy, policy development, surveillance and lending. He worked at the IMF early in his career before going to Wall Street, then served as special assistant to ex-US president Barack Obama. 

Lagarde chose Lipton, who also served as a US Treasury Department official in the Bill Clinton administration, as her top deputy shortly after she assumed the role in 2011.

Grasso, a dual national of Brazil and Italy, oversees the IMF’s budget, human resources, technology and audits. She joined the Fund in 2015 after serving as a human resources executive at the mining company Vale SA.

In another staffing change at the two Washington-based institutions, World Bank chief economist Penny Goldberg this week announced plans to step down on March 1 to return to her job as an economics professor at Yale University. 

Goldberg also told staff on Monday that Simeon Djankov, who was the director of development economics, resigned effective January 31, according to an email seen by Bloomberg News.

by Jeff Kearns, Bloomberg


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