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Wed Sep 25, 2019, 10:26 PM

World Bank's Georgieva becomes first IMF chief from emerging economy

Bulgarian economist Kristalina Georgieva was confirmed on Wednesday as managing director of the International Monetary Fund, the first person from an emerging-market economy to head the world’s crisis lender with its $1 trillion in resources.

A center-right politician who grew up in Bulgaria under Communism, Georgieva, chief executive officer of the World Bank, told reporters she was in high gear with her “sleeves rolled, ready to work” when she starts the job on Tuesday.

Georgieva, 66, will face a host of challenges as the head of the IMF, including a global economic slowdown triggered by escalating trade tensions between the United States and China, and historically high debt levels.

The United States, which represents the largest voting bloc on the IMF board, has withdrawn from multilateral accords, and risks are growing in emerging markets like Argentina, which last year received a $57 billion bailout, the IMF’s largest ever - and 61% of the Fund's total loan portfolio.

Georgieva replaces Christine Lagarde and interim director David Lipton, who, like Lagarde, has reaped criticism for the Argentine bailout.

Of the $45 billion disbursed since June 2018, 77% was reportedly used to finance capital flight - against the IMF's own rules. Lipton today rejected President Mauricio Macri's request for an additional $5.4 billion.

At: https://www.reuters.com/article/us-imf-georgieva-idUSKBN1WA0B3

Hello, I must be going: Departing IMF Director Christine Lagarde (right) greets incoming director Kristalina Georgieva.

Georgieva inherits one of the most complicated situations in the IMF's 73-year history:

A $57 billion bailout of Argentina's right-wing Macri administration - granted at Trump's insistence to promote Macri's unlikely re-election this year - is considered unpayable by most analysts, without converting the 4-year standby credit facility into an extended fund facility.

The Argentina bailout represents 61% of the IMF's loan portfolio, creating a major solvency risk for Fund should Argentina default - as 30 other countries have in the past, albeit for smaller loans.

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