France's Lagarde starts bid for IMF leadership

PARIS - French Finance Minister Christine Lagarde on Wednesday launched her bid to become the first woman to lead the International Monetary Fund, increasing tensions with developing nations who want one of their own as head of the scandal-rocked fund.

"If I'm elected I'll bring all my expertise as a lawyer, a minister, a manager, and a woman" to the job, Lagarde said.

Frenchman Dominique Strauss-Kahn quit last week as managing director of the IMF, which provides billions in loans to shore up the world economy, after he was accused of trying to rape a New York hotel maid.

U.S. Treasury Secretary Timothy Geithner praised Lagarde but stopped short of endorsing her candidacy. He described her and the head of Mexico's central bank, Agustin Carstens, whom Mexico is expected to nominate for the post, as "very capable."

Many European countries have offered their backing to Lagarde. Emerging economies have yet to rally behind a single candidate but say the job should be open to non-Europeans.

The IMF, founded in 1945, has traditionally been run by a European, the World Bank by an American.

The United States doesn't want to alienate developing countries, such as Brazil, China, and India, by quickly endorsing Lagarde. At the same time, if Europe loses its claim to the IMF post, the United States would likely have to give up the World Bank presidency.

IMF officials representing Brazil, China, India, Russia, and South Africa said in a statement Tuesday that they wanted the election of the next chief to be "truly transparent" and based on merit.

Lagarde's popularity is based in part on her reputation for deftness at international negotiations during the financial crisis. She also was seen as instrumental in getting the IMF and European Union to agree on rescue plans for Greece, Ireland, and Portugal when their debt crises threatened the entire shared euro currency.

Lagarde, 55, led the law firm Baker & McKenzie in Chicago before joining French politics in 2005. With excellent English, a direct manner, and a relatively pristine image, she is seen as a good candidate to step quickly into Strauss-Kahn's shoes.

But questions have surfaced about Lagarde's role, while she was finance minister, in getting arbitration in 2008 for French businessman Bernard Tapie, who won $449 million as compensation for the mishandling of the sale of sportswear maker Adidas.

Lagarde said she had "total confidence" about the issue and would remain a candidate even if an investigation went forward.