ristalina Georgieva will remain as the heads of the International Monetary Fund after the international board reviewed accusations that she improperly influenced a World Bank ranking of China s business climate.
The fate of Georgieva — a Bulgarian economist and first person from an emerging-market nation to run the IMF — had been in limbo since Sept. 16. That s when the report written by law firm WilmerHale and commissioned by the World Bank, her previous employer, asserted that she pressured subordinates to boost China in the bank s influential Doing Business Report.
The board ruled that the information presented in the course of its review did not conclusively demonstrate that the managing director played an improper role regarding the Doing Business 2018 Report when she was CEO of the World Bank, the fund said in a statement following board deliberations Monday.
Having looked at all the evidence presented, the executive board reaffirms its confidence in the management director's leadership and ability to continue to effectively carry out her duties. Even with the backing, the allegations against Georgieva and her subsequent fight for her job threaten to overshadow the annual meetings of the two institutions — which kicked off on Monday in Washington — at a time when both are tasked with supporting economies through the Covid-19 pandemic.
The accusations will likely also affect Georgieva's remaining time with the IMF, which is expected to deliver tough analysis and serve as an honest broker and honest advice-giver among governments, especially those seeking its aid.
The U.S. — the largest shareholder in both the IMF and World Bank — had called the allegations regarding Georgieva's tenure at the World Bank serious and debated calling for her resignation, Bloomberg News reported last week. Other major shareholders held back from voicing support pending the outcome of IMF internal review.
On Monday, the U.S. Senate decided that the allegations didn't ultimately justify removing Georgieva, a move that helped clear the way for her to stay.
However, in a call on Monday, Treasury Secretary Yellen told Georgieva that the law firm's report raised legitimate issues and concerns. The Treasury Department believes that effective steps need to be taken for strengthening the integrity and credibility of data exchanges with the IMF.
The executive board, with 24 directors representing 190 member nations, had been racing to reach a decision, after hours of discussions over multiple days with WilmerHale and Georgieva respectively.
Georgieva, the IMF s chief executive officer from 2017 to 2019, denied the allegations and told the IMF board that the report did not accurately describe my actions nor accurately portray my character or the way that I have conducted myself over a long career. In a statement released by her firm of public relations on Thursday, Georgieva thanked the IMF Board and said it agrees with her that the allegations were unfounded. Trust and integrity are the foundations of multinational organizations that I have faithfully served for more than four decades, she said.
The multitude of pressing concerns facing the global economy along with the absence of appetite for a change of leadership likely influenced thinking on the matter, said Natixis SA chief economist for Asia-Pacific who previously worked for IMF and mentioned as a survivor of the group.
My impression is that the board realizes this is not the right time to jump on another horse, she said. Georgieva will be worried about losing their driving seat if the Europeans lose confidence. China surely sees Georgieva as a benign MD. The U.S. has enough left on it table and the emerging world needs the IMF now. Still, some U.S. lawmakers are unhappy.
Georgieva s continued tenure as the head of the IMF would weaken the credibility of the institution and future decisions will be shrouded by uncertainty, Representative French Hill, an Arkansas Republican, said in an emailed statement.
A French Finance Ministry official said a review of the WilmerHale report didn t include details on precise elements to call Georgieva's conduct directly into question, which is why France has supported her.
Another European official, who asked not to be named, said countries including France and the U.K were among those behind the IMF chief because they don t see clear evidence against her.
France is traditionally a big vote in who gets to be the IMF managing director. Five of its chiefs have been French, and if the country didn't win the top job it played a pivotal role in determining who did.