IMF replaces European director as debt crisis boils

The International Monetary Fund replaced its European Director with a powerful, well-connected, insider on Wednesday in a sign the global lender is setting a more forceful course of action in dealing with the European crisis. The global lender named Reza Moghadam, currently director of the fund's strategy, policy and review department, as its new director for Europe, replacing Portugal's former central bank vice-governor Antonio Borges.
The change won praise from analysts who saw it as clear move to heighten the IMF's profile in dealing with a sovereign debt crisis that has dragged on for 18 months and threatens to throw a fragile global recovery into a downturn. "He is seen as a very credible and powerful insider," said Eswar Prasad, a former IMF official and a senior fellow at Brookings Institution in Washington.
"It shows that the IMF intends to be much more assertive in playing a prominent role in Europe and Reza Moghadam is somebody who is seen as being able to move the Fund to that more aggressive position." Borges, who was director of the IMF's European Department since November 2010, cited personal reasons in his decision to step down, effective immediately, the fund said.
Last month, Borges was forced to issue a hasty retraction after suggesting publicly that the global lender could buy Spanish or Italian bonds alongside the eurozone's bailout fund. Moghadam has been an influential behind-the-scenes policymaker in the Washington-based IMF, playing a key role in modernising the Fund and adapting its lending tools to make them more relevant to rising emerging market powers.
He was instrumental in a report last year that looked at the IMF's handling of the 2008-2009 financial crisis and has been a key IMF figure in the Group of 20. He has also helped sharpen the IMF's focus on better monitoring economies. The IMF said Moghadam would be replaced in his strategy, policy and review job by Siddharth Tiwari, who currently serves as the IMF's secretary whose duties include liaising with the IMF board of directors.