Christine Lagarde is a name most people will be familiar with, a pillar of authority within global finance and politics, and a female icon in modern times. Nominated as President of the European Central Bank (ECB) last year, she takes over the role previously held by Mario Draghi. So what is her background, and what does her appointment mean for the future of Europe’s financial stability?
Born in Paris in 1956 and high school educated in Le Havre in Northern France and Maryland, USA, Lagarde went on to graduate from law school at University Paris X followed by a Master’s degree from the Political Science Institute in Aix-en-Provence. In her teenage years, something that may be unknown to many is that, Lagarde was a French national champion of synchronised swimming! She began her career as an associate at international law firm Baker McKenzie in Paris, rising up the management ranks from Executive Committee member in 1995 to Chairman of the Global Strategic Committee in Chicago from 1999 to 2005.
She entered politics in 2005 with a position as Minister for Foreign Trade in the French government. Later she became Minister for Agriculture and Fisheries, and finally Finance and Economy Minister in 2007. In 2008 she was Chairman of the ECOFIN Council, bolstering the international financial policies of the EU’s Economics and Finance Ministers, and during France’s presidency of the G-20 in 2011 she was its Chairman.
In 2011 she became Managing Director of the International Monetary Fund (IMF), the first woman in the role following a long line of eleven men. She was subsequently recognised and honoured as an Officier in the April 2012 Légion d’honneur (the highest French order of merit or decoration). Appointed to a second term at the IMF in 2016, she proved her ability to make suitably austere choices whilst cleaning up the Eurozone crisis. She cultivated some resentment with her harsher measures, but ultimately dragged the Euro out of its perilous position and helped to maintain the Eurozone’s global financial strength. She has recognised the journey Ireland has come through, from recession and financial crisis, and indeed our economic performance.
Lagarde is now responsible for setting monetary policy and supervising banking for the 19 countries that use the euro. Her decisions will directly affect the 340 million people living in those member states, who collectively account for the second-largest economy in the world after the US.
The European Central Bank was a key driver behind the policies surrounding the 2012 economic crisis in Greece. With upcoming events like Brexit, the US Presidential Election, and tensions in the Middle East threatening to rock the euro to an even greater extent, Lagarde has the task of keeping a tight hold on financial stability for the currency.
Lagarde has frequently taken up the mantle for the promotion of gender diversity in economics. Citing the numerous studies indicating women are part of the solution for financial growth, she has been a consistent voice calling for boards to diversify and for women to participate in economic development. “It’s not just a moral issue, not just a philosophical issue. It just makes economic sense.” She has also named climate change as a critical priority for the ECB and has pledged to incorporate the risk of climate change into economic forecasts.
“I’m not in the business of reading tea leaves. I don’t have a crystal ball.” Lagarde said back in 2012. Her words very much still ring true in this time of uncertainty and volatility. At her first official monthly ECB meeting in December, she advised “I’m neither a dove nor a hawk” (terms associated with positioning on interest rates). She prefers to use “a little wisdom”, through debate and consensus.
The European Central Bank is no doubt in capable hands, and the results of Lagarde’s tenure have the potential to certainly be very interesting indeed.
Lara Treherne is Graduate Consultant with the L&P team at Cantor Fitzgerald, which provides ethical investment management and stewardship advisory services to non-profit clients.
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