Christine Lagarde, the head of the International Monetary Fund (IMF), is nominated – and likely – to succeed Mario Draghi as president of the ECB when his eight-year term comes to an end in October.
The heads of EU member states last night confirmed their preferred candidates for a raft of top jobs, including the ECB, setting the potential future direction of the bloc for the next five years.
Nigel Green, chief executive of Devere Group said, “The nomination of Christine Lagarde is both surprising and controversial.
“It is surprising because she herself has previously appeared to rule herself out from the job. Also, because she is not an economist, she’s a political figure with no direct experience of central banking.
“It’s controversial due to her ‘baggage.’ Under her leadership the IMF’s conduct “raised issues of accountability and transparency,” according to a report. She was also found guilty of negligence by a French court over her handling of a case during her time as the French finance minister.”
He continued, “However, despite some scepticism, I believe Christine Lagarde’s appointment would be well-received by financial markets.
“She is a known quantity. She is broadly considered a safe and competent pair of hands. She represents certainty. All this benefits markets.”
He added, “Criticism is being directed at her because her remit is to try and assimilate different fiscal policies with a single monetary one and she is not known as a leading economist, but more as a political figurehead.