IMF’s board of governors removes age limit for new managing director

The board of governors of the International Monetary Fund removed the age limit for the appointment of a new managing director on September 5.

The decision could facilitate the selection of the European Union’s candidate, Kristalina Georgieva, as the fund’s new head. Previous IMF rules prohibited the appointment of a candidate aged 65 or over, and Georgieva is 66.

In August, the IMF’s executive directors requested an amendment to the rules following Georgieva’s nomination. “Approval of the proposal required a simple majority of the votes cast, with a minimum participation requirement of a majority of governors holding two-thirds of the total voting power,” said the IMF. “Voting ran from August 21 to September 4.”

The board of governors is the highest decision-making body of the IMF. It is formed by one governor and one alternate governor representing each member country. Normally, the governor is the minister of finance or the central bank governor.

“Since 1951, the IMF’s by-laws had prohibited the appointment of a candidate aged 65 or over as managing director, and had also prohibited the managing director from serving past his/her 70th birthday,” said the IMF. The 70-year limit also needed to be removed for Georgieva to be able to serve for a full five-year term as managing director.

The amendment became effective immediately. It brings the appointment requirements of the IMF’s leadership into line with those of the executive board, and the president of the World Bank Group. These positions are not subject to any age limitation.

Since its creation in the Bretton Woods conference of 1944, the IMF has always been led by a citizen of a European state, while the World Bank has been presided over by a US citizen.

This unwritten rule has come under increasing criticism over the last few years, partly due to the underrepresentation of emerging economies such as China and India in the fund’s voting rights.

When the European Council nominated IMF managing director Christine Lagarde as new president of the European Central Bank in July, it launched another challenging selection process.

EU governments have proved adamant that they should retain the leadership of the IMF. In order to secure the position, they agreed to select a common candidate. Some member states put forward their finance ministers or central bank governors.

But the lack of consensus between northern and southern countries opened the door to Georgieva. She is a respected Bulgarian economist, who has acted as chief executive of the World Bank since 2017.

“The IMF executive board is engaged in the selection of a successor to outgoing managing director Christine Lagarde, who will step down on September 12,” said the IMF. “Nominations to the position close on September 6, 2019, and we intend to complete the selection process by October 4.”

A shortlist of up to three candidates, chosen by the executive board, is due to be published in around a week.