Will He or Won't He? IMF Chief Strauss-Kahn Urged to Resign

Economists, legislators and casual observers alike are part of a growing global chorus urging International Monetary Fund (IMF) Chief Dominique Strauss-Kahn to resign. Strauss-Kahn is currently a resident of Rikers Island for an alleged sexual assault on a New York City hotel worker over the weekend. He has been denied bail by the judge. His lawyer denies the claims and has said the IMF chief will plead not guilty. U.S. Treasury Secretary Timothy Geithner suggested to an audience in New York City that the IMF name an interim leader because Strauss-Kahn is “obviously not in a position” to run it, according to a Bloomberg report. Austrian Finance Minister Maria Fekter told reporters in Brussels Tuesday that Strauss-Kahn “risks damaging the IMF.” Even many citizens in France, which is culturally known to look the other way on personal matters, has expressed regret and anguish over the scandal. The Bloomberg report notes that "At stake is leadership of an institution that approved a record $91.7 billion in emergency loans last year and provides a third of bailout packages in Europe. Strauss-Kahn's arrest may give emerging markets, the drivers of global growth, momentum to their push to end a postwar deal under which a European heads the fund and the U.S. picks the World Bank president." With global politicians beginning to question his current capacity, it's only a matter of time before a conscious person bows out. Indeed, his diminished reputation and inability to do his job limits the full potential of the IMF. Unfortunately, Strauss-Kahn is a bright economic mind. He has brought the fund back to economic relevance and it's now a key negotiator in ongoing European bailout talks. As Geithner put it, "You want the IMF to have the capacity to be helpful” on global financial issues, but you can't be very helpful in a jail cell.