July 12 (Bloomberg) -- Christine Lagarde chose David Lipton, an adviser to President Barack Obama and a former U.S. Treasury Department official in the Clinton administration, to be her top deputy at the International Monetary Fund.
A week after taking over as the IMF’s managing director, Lagarde also created a fourth deputy managing director position for China’s Zhu Min, a move that will raise that nation’s status at the institution. Zhu, a special adviser to the fund’s chief, will take up his post July 26. Lipton also will start then as a special adviser and assume the deputy’s job on Sept. 1.
Lipton combines “international expertise, public sector policy making and private sector experience and a proven track record in economic crisis management,” Lagarde said in an e-mailed statement.
Zhu “will play an important role in working with me and the rest of my management team in meeting the challenges facing our global membership in the period ahead, and in strengthening the fund’s understanding of Asia and emerging markets more generally,” she said.
The choices reflect the growing influence of China, the world’s second-largest economy, and the U.S.’s traditional lock on the fund’s second-ranking job. Both countries supported Lagarde over Mexican Central Bank Governor Agustin Carstens, who failed last month to get enough support from emerging countries to end a 65-year European monopoly on the IMF’s top job.
The ascension of a Chinese official to a top IMF management position for the first time “is an important acknowledgement of China’s primary role within the” membership, said Domenico Lombardi, a former IMF board official and a senior fellow at the Brookings Institution in Washington. It may “enhance the ability of the IMF to act as a facilitator between the U.S. and China.”
The new position follows the appointment of Justin Lin as World Bank chief economist in February 2008.
Lipton, who worked at the IMF for eight years after receiving a Ph.D. in economics from Harvard University, held various positions at Treasury from 1993 through 1998, including undersecretary for international affairs at the time of the Asian crisis.
Before the White House job, Lipton was head of global country risk management at Citigroup Inc., taking home a $1,275,000 bonus in 2008 and a $762,000 bonus in 2009, according to White House financial disclosure reports. He will replace John Lipsky, whose term ends in August.
Lipsky stepped in as acting managing director after the arrest and resignation of former IMF chief Dominique Strauss-Kahn, who has pleaded not guilty to sexual assault charges in New York City. Lipsky represented the IMF yesterday as finance ministers from the euro region discussed a new strategy to contain the debt crisis.
At the White House, Lipton, 57, served as special assistant to Obama and at the National Economic Council and the National Security Council, helping handle such matters as the sovereign debt crisis in Europe and emerging economies.
“He will bring a very heavy political clout that will make the institution closer to the senior political leadership of the world,” Brookings’ Lombardi said.
Zhu, 58, who was a deputy governor of the People’s Bank of China, joined the IMF in May 2010. He previously was an executive vice president at Bank of China Ltd.
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