Incoming IMF Chief Intends To Focus on Emerging Nations

By GABRIELE PARUSSINI and NATHALIE BOSCHAT
October 2, 2007 - wallstreetjournal

PARIS -- The International Monetary Fund needs to increase its relevance and legitimacy to better respond to international crises, newly appointed Managing Director Dominique Strauss-Kahn said.

In his first news conference since being nominated for the post over the summer, he said overhauls he intends for the IMF will allow it to adapt to "a new balance of power in the world" and "to the new kind of financial crisis" that has hit financial markets recently.

"I define myself as a candidate for reform," said Mr. Strauss-Kahn, a former Socialist French finance minister, adding he will aim to give more representation to emerging countries when he takes office Nov. 1.

To ensure a fairer representation within emerging economies, such as China, India and Brazil, he suggested that Europe, Russia and others give up some of their voting power, adding that this wouldn't come at the expense of the fund's largest shareholder. "Nobody has in mind that the U.S. see their share diminishing," he said.

Mr. Strauss-Kahn didn't share the pessimism of those worried about exchange-rate imbalances, notably the weakness of the U.S. dollar. "I don't see the dollar collapsing," he said.

He said debate about the Chinese currency's value needs to be taken up by multilateral institutions. "It's in nobody's interest to let this debate grow sour" between China and the U.S., he said.