As the IMF annual     meetings draw to a close, two intriguing questions remain     unanswered. Will IMF managing director Christine Lagarde have     her term of office extended when it expires in July, and who     will succeed her when she does eventually step down?        

   

Lagarde has said she is     “willing” to serve a second five year term, but that     the matter is not in her hands. She is “popular with     constituents but faces a challenge from the US to shift away     from a Europe-dominated IMF,” said a source close to the     Fund.

   

First deputy managing     director David Lipton, an American, has insisted that the next     IMF head will be a non-European — though he also said the     selection process would be “strictly merit-based”.     This applies to “after” Lagarde’s term ends, an     IMF official said.

   

But while Lagarde has     strong support from some advanced and emerging economies, her     continuance for five more years is not assured, said a former     IMF deputy managing director.

   

He suggested a possible     “deal” where-by Europe would renounce its right to     nominate the head of the IMF, while the US did the same for the     World Bank.

   

“The US argues     that now the World Bank presidency has been given to a Korean     American [Jim Yong Kim] the time has come for a non-European     head of the IMF,” the former deputy managing director     said.

   

One name mentioned is     Harvard economics professor Carmen Reinhart. “These things     go round from time to time,” Reinhart said yesterday,     declining to comment on whether she wanted the job.

   

But if the list is     opened to candidates from emerging economies, it might include     people such as Mexican central bank governor Agustín     Carstens, who was elected chairman of the IMF’s     policy-setting International Monetary and Financial Committee     earlier this year.

   

At the time of     Lagarde’s selection five years ago, the rules were changed     in the sense that “anyone could apply and a number of     candidates did,” an IMF source said. The IMF board     shortlisted two — Lagarde and Carstens.

   

Meanwhile, the fact     that parts of Europe have since been plunged into financial     crisis, requiring financing from the IMF, while China and other     emerging markets have more recently run into difficulty might     weaken the claims of either to lead the IMF — and bolster     the US position.

   

UK finance minister     George Osborne has come out in favour of a second term for     Lagarde. She “steered the IMF through the Greek crisis,     the Ukraine situation and recovery from global recession,”     he told Emerging Markets. “I can think of no one better to     lead the IMF.”

   

Lagarde, meanwhile,     signalled in Lima her unhappiness with the US     Congress’s continued failure to ratify a 2010 agreement     that would greatly boost the IMF’s permanent financial     resources, or quotas, and give more say to key emerging     economies.

   

Asked whether she could     continue running the IMF with this uncertainty hanging over     her, Lagarde said at a briefing in Lima that it “does not     impede my ability to manage the IMF, but it is an issue for the     IMF’s credibility”.

   

Some have suggested a     deal whereby the US would stump up cash in return for securing     leadership of the IMF. “The IMF should be a quota-based     institution, and [bilateral] loan resources secured when I took     over in 2012 are no substitute,” Lagarde said.

   

The next milepost      is the G20 Leaders’ Summit in Turkey in November. The hope     is that by then progress will be made in getting legislation     through Congress.

   

“The IMF has moved     with the times and that includes shifting more of its voting     power to the emerging world,” Reinhart said.