De Larosiere Will Resign as IMF Managing Director

Jacques de Larosiere, managing director of the International Monetary Fund for the last eight years, will resign his post at the end of this year, the Washington Post has learned.

De Larosiere delivered the surprise announcement to his executive board Friday.

With De Larosiere’s departure, the two major multinational lending agencies will have new leadership. Former Rep. Barber B. Conable Jr. (R-N.Y.) took over as head of the World Bank on July 1.

In Gleneagles, Scotland, where finance ministers of the European Economic Community were holding a weekend caucus before the IMF-World Bank session, two names led the speculation over who would be De Larosiere’s successor: Dutch Finance Minister H. Onno Ruding, chairman of the IMF policy board known as the Interim Committee, and Lamberto Dini, Bank of Italy deputy governor.

Although the IMF post usually is held by a European, the United States will play a key role in selecting De Larosiere’s successor, as it did in the choice of Conable to head the World Bank.

De Larosiere has told colleagues that, for personal and professional reasons, this is the “right” time for him to leave his post at the IMF, which is entering a new collaborative phase in managing the Third World’s debt problems with the World Bank.

Also, French sources suggest that De Larosiere believes that with the rise to power of French Premier Jacques Chirac, this may be a more opportune time for him to resume his government career than to wait until mid-1988, when his second term as IMF managing director would end.

Before taking the IMF assignment, De Larosiere had been the director of treasury in the French Ministry of Finance.

Although the IMF has been criticized in recent years as enforcing too much austerity on its Third World borrowing clients, De Larosiere brushes this aside.

He told the board that there are personal reasons for his decision to quit by the end of the year, primarily that his daughter, who has now graduated from college here, has returned to France.

In addition, he told friends, the IMF is embarking upon a new phase in which he believes it would make sense for a new director to take over. For example, the IMF is about to start negotiations on acquiring new funds from member governments--technically called expanding the IMF quotas.

The quota process usually takes up to three years to conclude, which means that even if he had stayed until the end of his term, the negotiations would not have been completed.