Senior IMF Economist Lashes Out At “Tainted” Leadership In Resignation Letter

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A senior economist at the International Monetary Fund (IMF) has criticised the fund for its “incompetence” in dealing with the eurozone crisis; and slammed the decision to appoint Christine Lagarde as managing director, in a resignation letter submitted to the Dean of the IMF Executive Board on June 18, 2012.

Peter Doyle, a division chief in the IMF’s European Department, had resigned following 20 years of service, but had written the letter as he “wanted to take this opportunity to explain (his) departure.”

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In the letter, which was obtained by CNN last Friday, Doyle admitted that he was “ashamed to have had any association with the Fund at all,” and blamed the fund for its failure to issue proper warnings ahead of the eurozone crisis – despite identifying the symptoms “well in advance.”

“This (resignation) is not solely because of the incompetence that was partly chronicled by the OIA report into the global crisis and the TSR report on surveillance ahead of the Euro Area crisis,” he wrote.


“Moreso, it is because the substantive difficulties in the crises, as with others, were identified well in advance but were suppressed here,” he said.

The ex-IMF economist, who is believed to be still serving his notice period as an adviser, went on to add that the failure of the fund to issue “timely sustained warnings” resulted in “suffering (and risk of worse to come) for many including Greece,” with IMF only able to play “catch-up and reactive roles in the last ditch effort to save it.”

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“Further, the proximate factors which produced these failings of IMF surveillance – analytical risk aversion, bilateral priority and European bias – are, if anything, becoming more deeply entrenched,” Doyle wrote.

Though Doyle noted that current IMF Managing Director Christine Lagarde possessed “integrity” and “élan”, these qualities, Doyle said, did not “make up for the fundamental illegitimacy of the selection process.”

Lagarde’s appointment as Managing Director, along with those of her predecessors, “have all-too-evidently been disastrous,” he claimed, citing how other members of the staff had been “overwhelmed” by the implication of those choices.

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Ending off his letter, Doyle said that had he “understood” how the Executive Board had “preferred” a “handicapped fund”, he would not have joined the fund in the first place.

“There are good salty people here. But this one is moving on. You might want to take care not to lose the others,” Doyle signed off.

In an interview with Reuters, IMF spokesman William Murray said that while “we have no evidence his (Doyle’s) views were suppressed, nor any views were suppressed," the IMF would take his remarks seriously, especially after an independent evaluation office had put together a report that raised similar concerns to Doyle’s.

“Peter's remarks are well documented in the public record, including reports issued by the Independent Evaluation Office, via the triennial review of surveillance, and in many statements by the managing director, including on the findings in these various reports," Murray said.

In regards to Doyle’s comment over Lagarde, an IMF insider, who requested anonymity, also told Reuters that “there is certainly a concern that the MD is more a politician than an economist and that she can be swayed by those close to her."

However, “she is certainly seen as a powerful messenger for the Fund's position,” Reuters source said.

Read The Full Letter Here