Davos – IMF’s Lagarde says China should communicate better with financial markets

Lagarde’s initial five-year term as managing director expires on July 5 and Mozhin said he expects the board to complete its selection process by early March.

Speaking about China’s economic slowdown, she said the country needed to refine its communication on reforms it was taking and its market policies.

But Ms Lagarde’s popularity among numerous fund’s most powerful members – including emerging markets – and her signal last October that she is open to serving a second term is driving many fund watchers to call the selection all but over.

The only snag however is that the incumbent, Christine Lagarde is interested in holding the post for another five years, her second term.

Manuel Valls, French Prime Minister, who as a socialist comes from a different political party from Ms Lagarde, said Finance Minister Michel Sapin would make a statement on the issue on Friday.

“I have a very close working relationship with her, (and) the highest regard for her”, Lew said.

The German government quickly followed, with a finance ministry statement saying Lagarde “was a circumspect and successful crisis manager during the hard period after the financial crisis”. She is the first woman to lead the Washington-based institution.

The risks are “bigger on the horizon than what we would have thought”, she said.

Lagarde’s renewal also faces a personal legal challenge: she could stand trial in France over her role in a banking scandal that predates her arrival at the International Monetary Fund.

In December investigating judges placed her under formal investigation in the long-running affair of Bernard Tapie, who received a substantial state payout for his dispute with a state bank during her time as finance minister.

Ms Lagarde has said she will appeal against the court’s decision regarding the €400m payment.

So far, no challengers have emerged for the top International Monetary Fund job.