Christine Lagarde or Gordon Brown for the IMF top job?

People were already asking who would become the new IMF Director General before news broke at the weekend that Dominique Strauss-Kahn had been arrested and charged for an alleged sex attack on a maid at a Manhattan hotel.

That is because Mr Strauss-Kahn had been earmarked as the likely Socialist Party candidate in next year’s French presidential elections. The Socialists are due to make their choice this autumn, and candidates have to put their name forward by June 2011.

DSK’s resignation from the IMF top job had therefore always been a near certainty – though the manner of his departure cannot have been anticipated. And as the press now feasts on the story of his downfall, so aspects of that story are beginning to have a bearing on who should succeed him.

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Front-runner for the job
Given the nature of Mr Strauss-Kahn’s alleged crime in a New York hotel suite (and subsequent claims that this may not have been the first time), it cannot have harmed the prospects of Christine Lagarde, France’s finance minister, that her appointment would make her the first-ever female boss of the organisation which oversees the global financial system.

Within the space of three days, she has risen from relative outsider to front-runner for the job. On 18 May bookmaker William Hill ranked her tenth in the list of runners and riders, with odds of 14-1 and trailing behind the likes of Philipp Hildebrand, of the Swiss National Bank, and Singapore’s Tharman Shanmugaratnam.

But by 20 February, aided by the endorsement of German Chancellor Angela Merkel (who said that she rated her highly) and Italy’s Silvio Berlusconi, the odds on Ms Lagarde had shortened to 4/5. She is now hot favourite for the job ahead of Kemal Dervis, Turkey’s former finance minister, and India’s Montek Ahluwalia, a former IMF employee and currently deputy chair of his country’s Planning Commission.

Global finance star
Christine Lagarde is no flash in the pan, however. The 55-year-old entered frontline French politics relatively late, leaving her role as global head of Chicago law firm Baker & Mackenzie in 2005 to join Dominique de Villepin’s government as Trade Minister.

Appointed France’s Finance Minister in 2007, she had already established herself as a star in the global financial firmament when, at the end of 2009, the Financial Times ranked her top among Europe’s treasury ministers. It called her “hard-working and attentive to detail” and noted that she had “swiftly put in place a flurry of government support measures that have helped soften the impact of the crisis”.

The main objection to her candidature – and to that of other Europeans – reflects the shift in global economic power in recent years. The top jobs at the IMF and the World Bank have hitherto been divided up between Europe and the United States.

The emerging BRIC economies (Brazil, Russia, India and China) now feel they are entitled to a stronger representation at global finance’s top table. Zhou Xiaochuan, governor of China’s central bank, has said: “The senior management team of the IMF should better reflect changes in world economic patterns and should be more representative of emerging market economies.”

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Brown’s faltering candidature
If such remarks weaken Christine Lagarde’s position, they do no favours either for the faltering candidature of the UK’s Gordon Brown. Last month, on 19 April, Prime Minister David Cameron suggested he would not endorse his predecessor should the former Labour leader decide he wants the IMF job.

“It does seem to me that if you have someone who didn’t think we had a debt problem in the UK when we self-evidently do have a debt problem, then they might not be the most appropriate person to work out whether other countries around the world have debt and deficit problems,” Mr Cameron told BBC Radio’s Today programme.

Then, earlier this week – after DSK’s arrest but before his resignation – Chancellor George Osborne, interviewed by Channel 4 News Economics Editor Faisal Islam, refused to be drawn on the possibility of a UK nomination for Mr Brown.

“As it happens, Gordon Brown has neither asked me directly or indirectly to be considered for the job,” Mr Osborne said. “So I’m at the moment focused on making sure we get the best person for the job.”

But unless the UK nominates him, Mr Brown is unlikely to be recommended by another board member. The IMF’s process for selecting its managing director stipulates a candidate has to be proposed by at least one of the board’s 24-strong team.

Perfect for the job?
Until early today William Hill ranked Mr Brown equal fourth favourite at 8-1, alongside Tharman Shanmugaratnam and former German finance minister Peer Steinbrueck. Since this morning, though, Mr Brown’s odds have dropped to 20-1 – perhaps off the back of the ex-PM’s denial that his current visit to South Africa is a pitch for the IMF job.

Other names in the frame include Bank of Mexico Governor Augstin Carstens, Bundesbank President Axel Weber, and Trevor Manuel, South Africa’s former Finance Minister. Today William Hill told Channel 4 News it was offering odds of 50-1 on the chances of Alistair Darling becoming managing director. Mr Darling, who guided the UK through the world financial meltdown between 2007 and 2010, has been cited as an outside bet for the job.

Meanwhile, an article in today’s Guardian proferred the credentials of another New Labour grandee, Lord Mandelson, as evidence that he was “perfect for the job” – to which a William Hill spokesman responded by suggesting that “there aren’t enough noughts in the world to put odds on Peter Mandelson!”