Agustin Carstens (IMF)

Source: IMF photo

Agustin Carstens, Mexico's central bank governor and sole emerging market contender for the top post at the International Monetary Fund, believes the multilateral lender has four fundamental weaknesses.

In a letter to the IMF's executive board issued on Tuesday, Carstens praised the Fund's past achievements, thanked the board for considering his candidacy but said the Fund’s institutional development has lagged behind global developments.

He explained:

The next Managing Director will need to address four remaining fundamental weaknesses: Governance; the ability to perform appropriate surveillance (both at the national and multilateral levels) and prevent crises; the capacity to effectively support crisis resolution; and, finally, the competence to induce policy coordination at the global level. Failure to address these issues risks diminishing the IMF’s relevance and alienating its membership.

Carstens' full statement: Agustin Carstens' statement to IMF excutive board (English)

And before signing off, he concluded:

Without an effective Fund, the world economy risks localized crises spreading to broader areas, with all the suffering this implies. The Fund is a unique institution that can provide the capacity and credibility to avert crises and resolve them when they occur.

At this crucial moment, the Fund needs an MD who can provide strategic direction to the institution. It is vital that the Fund send the strongest signal that, by virtue of its leadership, it is not lagging behind, but one step ahead of global developments, so that it may continue to flourish in serving all of its members.

The selection process at the IMF is expected to be completed by June 30.

See also:
A non-European head will give IMF legitimacy - Rajan - FT Tilt
Carstens' tough-sell in Argentina - FT Tilt
One of us: emerging markets push for new IMF chief - FT Tilt