While Lagarde doesn’t carry a pedigree in central banking like the institution’s current chief Mario Draghi, who spent nearly eight years at the ECB, she is “likely to take an expansive approach to both conventional and unconventional monetary policies that could support growth in the eurozone,” said Eswar Prasad, a former IMF economist who is now a professor at Cornell University, according to The Wall Street Journal.
Lagarde, a former French finance minister, would be effective in building consensus, said Prasad, “but whether she can provide the sort of visionary and creative technocratic leadership that Draghi brought to the job remains to be seen.” Draghi’s term ends on October 31, 2019.
Lagarde’s nomination came after days of talks among member states on numerous jobs in the EU. “Christine Lagarde will, with her international background and standing as current managing director of the International Monetary Fund, be a perfect president of the European Central Bank,” European Council President Donald Tusk said on Tuesday (July 2).
Some of the names reportedly considered for the job before this announcement included German central bank head Jens Weidmann, French ECB members Benoît Coeuré and François Villeroy de Galhau and former Finnish central banker Erkki Liikanen.
Formal approval of Lagarde’s nomination should happen in the coming months. Lagarde tweeted that she was “honored to have been nominated,” adding that she was temporarily giving up her role as the Washington-based IMF chief. She became the first woman to head the organization in 2011, playing an important role in securing bailouts in Europe after the 2008 financial crisis. Before that, she worked as an antitrust lawyer, becoming a partner and then the first female chairman of the Chicago-based law firm Baker McKenzie.