Christine Lagarde: killer shark takes the helm at the ECB

Former IMF chief Christine Lagarde has a reputation for easy manners and good humour, but she has a ruthless streak. She’ll probably need it as she takes up her new role. 

Christine Lagarde © Victor J. Blue/Bloomberg via Getty Images

1170768313

Christine Lagarde © Victor J. Blue/Bloomberg via Getty Images

When Christine Lagarde takes charge of the European Central Bank (ECB) at the end of the month she'll need all her political savvy and emollience to deal with "an unprecedented revolt" in the ranks, says Bloomberg. Appointed in July supposedly as the continuity candidate to succeed Mario Draghi Lagarde is coming under pressure to reverse her predecessor's plan to reactivate quantitative easing. Following a September meeting described by one participant as "the most tense" he can remember, a cabal of hawkish big-hitters, led by the Bundesbank's Jens Weidmann (who, awkwardly, she beat to the top job), is shouting loudly for a change of strategy.

A fierce thirst for success

Yet Lagarde is "unlikely to be perturbed by such criticism", says Adam Sage in The Times. She's faced accusations of incompetence throughout her career and has usually trounced critics. Friends say "she possesses an understated self-confidence and a thirst for success", underpinned by a fierce work ethic. "When we work on a particular matter," she said in 2017, "we will work the file inside, outside... historically, genetically and geographically. We want to be completely on top of everything."

Lagarde was born in 1956, the daughter of teachers, and grew up in Le Havre in northern France with three younger brothers. Her "first notable triumph" was winning a place in the French synchronised swimming team, which she later said taught her the invaluable skill of holding her breath. When Lagarde was 17 she won an exchange scholarship to America, later returning to France to study law. After twice failing to get into the French civil service and being told "she would never make partner in a French law firm as a woman", she joined the Chicago-based firm Baker & McKenzie, eventually rising to become the first woman to lead it in 1999.

The lesson she took from that early failure, she told CNN, was: "Oh get over it. Get over it and move on." Lagarde's years working in America gave her "an empathy with Anglo-Saxon ways" and "a pragmatic, team-oriented style of solving problems", says The Sunday Times. Still, she leapt at the chance to return to France to join the government as trade minister in 2005. "Lagarde's charm and international contacts book became very valuable to the French government," notes The Observer she had a "good" financial crisis, raising her status on the world stage. But during her time as economy minister, she took a decision "that has proved to be the one significant blot on her career", says the Financial Times: approving a €403m payout to the French tycoon Bernard Tapie in 2008, which was later ruled as "illicit". She escaped punishment after judges said they wanted to preserve her "international reputation".

Lagarde's easy manners and humour have made her a popular figure among world leaders: she appears as at ease with Putin as with Trump, "who occasionally seeks her out for economic advice". But while her tenure at the IMF has been generally judged a success, one of the "biggest decisions she took" the $57bn bailout of Argentina has returned to haunt her: the country now looks set to default on its sovereign debt again.

"I'm a very firm believer that the best way to arrive at agreed solutions is to reach out, to find the common denominator, rather than to focus on the differences," says Lagarde. Still, "cross her" at your peril, says The Sunday Times. As one sacked official once remarked, "She's always smiling, always polite, but she's an American lawyer at heart a killer shark".

Recommended

Tim Cook: the man who filled Steve Jobs’ shoes at Apple
People

Tim Cook: the man who filled Steve Jobs’ shoes at Apple

No one expected much from Tim Cook when he took over the top job on the Apple founder’s death. But he has quietly led the firm to extraordinary new he…
15 Jan 2022
Hu Xijin: the silencing of China’s troll king
People

Hu Xijin: the silencing of China’s troll king

Hu Xijin had been described as the only man in China who could speak his mind – not least because his mind was as one with the ruling party – and what…
8 Jan 2022
The faces of 2021
People

The faces of 2021

It has been an especially turbulent year in politics, monetary policy and new stockmarket listings. Four key movers and shakers caught our eye
29 Dec 2021
MoneyWeek Christmas quiz 2021
People

MoneyWeek Christmas quiz 2021

It’s been a year of speculative frenzy, economic uncertainty and political scandal. See which financial stories you remember – and which passed you by…
24 Dec 2021

Most Popular

Five unexpected events that could shock the markets in 2022
Stockmarkets

Five unexpected events that could shock the markets in 2022

Forget Covid-19 – it’s the unexpected twists that will rattle markets in 2022, says Matthew Lynn. Here are five possibilities
31 Dec 2021
US inflation is at its highest since 1982. Why aren’t markets panicking?
Inflation

US inflation is at its highest since 1982. Why aren’t markets panicking?

US inflation is at 7% – the last time it was this high interest rates were at 14%. But instead of panicking, markets just shrugged. John Stepek explai…
13 Jan 2022
Tech stocks teeter as US Treasury bond yields rise
Tech stocks

Tech stocks teeter as US Treasury bond yields rise

The realisation that central banks are about to tighten their monetary policies caused a sell-off in the tech-heavy Nasdaq stock index and the biggest…
14 Jan 2022