House Republicans Urge Yellen to Push Replacing IMF Chief

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(Bloomberg) -- A group of House Republicans are demanding that the US use its influence to replace the head of the International Monetary Fund over alleged mismanagement, citing reports of ethical breaches and inability to hold China accountable for its lending and currency practices.

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House Financial Services Committee Chairman Patrick McHenry and Representatives French Hill and Blaine Luetkemeyer sent the letter Thursday to Treasury Secretary Janet Yellen calling on her to pursue a replacement for Managing Director Kristalina Georgieva.

“We urge you to identify new leadership that will enable the fund to pursue its mission with integrity and with the full confidence of Congress,” the lawmakers said. “Georgieva’s tenure at both the World Bank and IMF has been plagued by ethical lapses” that “cast doubt on her leadership qualities and ability to head the fund,” they said.

The Treasury and the IMF didn’t immediately provide comment.

The letter comes as support in Europe is growing for Georgieva to serve a second term.

Read More: IMF Chief Georgieva Wins German Backing for a Second Term

European Union finance ministers earlier this week gave their unanimous support for a second five-year term, a key development as major European governments, by tradition, choose the head of the IMF. The selection must be approved by the board, where the US has the biggest vote.

In the letter, the lawmakers cited the IMF weighing whether to replace Georgieva in October 2021 after an investigation alleged that she improperly influenced a ranking of China’s business climate compiled by the World Bank, where she had previously worked. Georgieva denied the allegations.

They also wrote that the IMF under Georgieva “has been missing in action when it comes to holding China accountable to international norms on debt transparency and exchange rate management.”

The letter additionally referenced a 2021 Bloomberg News report on IMF officials softening a warning about environmental risks to Brazil’s economy after then-President Jair Bolsonaro’s government objected to the language. The IMF said at the time that the decision was part of its normal process.

The representatives also cited a 2022 Wall Street Journal article critical of her time at the World Bank, alleging she ignored concerns about sexual misconduct by a top official. Georgieva responded at the time that there was insufficient evidence to pursue the matter.

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