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Speaker 1: When Christine Lagarde was selected to become the first female

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Speaker 1: Managing director of the I m F in eleven, it

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Speaker 1: was simply another first for the French lawyer, whose long

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Speaker 1: career has included experiences in the legal, governmental, and economic

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Speaker 1: fields in both the public and private sectors. Born in

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Speaker 1: France to a family of academics, Legard completed her high

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Speaker 1: school education at the Holton Arms School in Maryland before

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Speaker 1: attending college in France, where she obtained master's degrees in

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Speaker 1: English labor law and social law. After a successful career

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Speaker 1: at the Chicago based law firm Baker and Mackenzie, Legard

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Speaker 1: held several ministerial positions in the French government, including Minister

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Speaker 1: of Agriculture and Minister of Finance, becoming the first woman

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Speaker 1: to hold that role in any G eight economy. In

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Speaker 1: June of twenty eleven, Lagard was elected to succeed Dominic

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Speaker 1: Strauss Khan as the Managing director of the I m F,

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Speaker 1: a role she holds to this day. She recently sat

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Speaker 1: down with Carlisle Group co founder David Rubinstein. They spoke

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Speaker 1: on David reuben Stein's Bloomberg television program Peer to Peer Conversations.

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Speaker 1: Many people don't know what the IMF actually is. The

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Speaker 1: International Monetary Fund was set up seventy five years ago

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Speaker 1: by forty four men who decided that women. There was

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Speaker 1: no woman in those days. So forty four men in

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Speaker 1: on the eve of the end of the Second World

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Speaker 1: War with a view to avoiding major economic crisis, major

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Speaker 1: instability in the world, which in the view, led to

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Speaker 1: the war. So that's the intention. Where do you get

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Speaker 1: your money from? All the membership, every member dred and

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Speaker 1: eighty nine members. Every member contributes to the financing of

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Speaker 1: this common pot. It seemed to be an informal understanding

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Speaker 1: that the World Bank would be headed by an American,

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Speaker 1: the IMF by a European, and that has been the

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Speaker 1: case ever since then. So am I correct? You know,

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Speaker 1: I want to believe that it's going to be headed

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Speaker 1: by somebody who has the competence to do the job.

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Speaker 1: Also fair observation that it has been a European at

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Speaker 1: the Fund and it has been an American at the Bank.

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Speaker 1: I think that's how they cut those arrangements in the

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Speaker 1: early days at a time when the world looked a

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Speaker 1: lot different, Well, the world looked different today. For example,

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Speaker 1: Asia's much more significant so did the people from China

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Speaker 1: or Japan say what about ask the emerging market economies

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Speaker 1: are very interested in the institution, and China is certainly

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Speaker 1: extremely interested as well. China has a representative on my

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Speaker 1: management team. There is a managing director, that's how I'm

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Speaker 1: called m d Um. There is a first deputy managing

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Speaker 1: director who's an American, and I have three deputy managing directors.

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Speaker 1: One is Chinese, one is Brazilian, and one is Japanese.

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Speaker 1: So there is a lot of diversity on the on

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Speaker 1: the management team. Let's go back to how you actually

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Speaker 1: came to this position. So you grew up in France,

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Speaker 1: I assume, and what did you What did your parents do?

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Speaker 1: Were they educators or they in government? They were both professors.

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Speaker 1: My father as a professor of English literature at university

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Speaker 1: and my mother was teaching um French Grammar, Latin and

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Speaker 1: Ancient Greek. So that that's the universe that populated my

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Speaker 1: childhood and a lot of literature. So when you're growing

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Speaker 1: up with parents like that, I guess you're really good

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Speaker 1: in languages. They make sure that you know all those languages.

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Speaker 1: I was hopeless. I was really bad. Actively they doubt

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Speaker 1: that so you were, I assume a very good student

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Speaker 1: and uh where you're also interested in synchronized swimming at

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Speaker 1: that time, and can you explain what synchronized swimming really

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Speaker 1: is and how you came to be on the national

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Speaker 1: team of France. The athletic activities had to do with

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Speaker 1: the riots that we had in France in nineteen um,

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Speaker 1: you know, students were taking the streets. My parents were

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Speaker 1: terrified that I would do that too, so they allowed

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Speaker 1: me to go to the swimming pool of the club,

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Speaker 1: so I could skip school and spend all my time

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Speaker 1: by the pool. And I enjoyed swimming at the time,

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Speaker 1: and gradually, you know, one day after the other, I

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Speaker 1: became really interested in that synchronized swimming, which brought together girls.

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Speaker 1: So it's teamwork that required music and a liking of music,

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Speaker 1: and I'd always liked music and uh and and and

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Speaker 1: discipline and methods, so I joined the team at the time.

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Speaker 1: So with synchronized swimming you came you became a member

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Speaker 1: of the national team of France, where you won the

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Speaker 1: Olympic team as well, because it wasn't an Olympic sports

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Speaker 1: at that time, but I did European Championship and many

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Speaker 1: international events. You still do swimming or synchronized including this morning. Wow,

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Speaker 1: how do you have time for that? I get about

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Speaker 1: five o'clock. Oh, that probably helps, so it doesn't open

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Speaker 1: it until six, so I have to do a bit

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Speaker 1: of gym before that. What did you study in college?

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Speaker 1: I had a very classic education. I studied, um, you know,

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Speaker 1: the basic basic subjects that I suppose everybody studies, which

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Speaker 1: is French mouth, English, geography, history, chemistry, and physics, plus

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Speaker 1: some sports which were not so important in those days

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Speaker 1: in France, but very often leaders in France. How go

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Speaker 1: to certain schools and they go to these very prestigious schools.

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Speaker 1: Did you go to one of those schools? Now? I

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Speaker 1: failed miserably so. First well, because the first time I

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Speaker 1: was I was in love with somebody who was going

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Speaker 1: to become my husband, and I did not study very hard.

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Speaker 1: And the second year I did study really hard with

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Speaker 1: a group of others who studied equally hard, and I

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Speaker 1: totally missed the date of registration to actually take the

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Speaker 1: various examples. You became a lawyer, though, and what propelled

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Speaker 1: you to want to be a lawyer? The death penalty.

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Speaker 1: I wanted to participate in abolishing the death penalty. When

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Speaker 1: I started law school, the death penalty was one of

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Speaker 1: the the tools of criminal law and or personal religious

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Speaker 1: and other reasons. I wanted to participate in eradicating this

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Speaker 1: penalty in in the legal arsenal of France. And unfortunately,

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Speaker 1: when I finished my my my law school, and when

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Speaker 1: I graduated and could have joined that group, the death

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Speaker 1: penalty had been abolished, right but nonetheless state as a lawyer,

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Speaker 1: and if you practice in France, yes, I practiced in

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Speaker 1: France for a few years, and I was doing like

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Speaker 1: so many young lawyers in those days. You had to

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Speaker 1: do tags, you had to do corporate, you had to

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Speaker 1: do antitrust, you had to do labor. Not luckily, the

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Speaker 1: French president to be elected was a socialist, and that

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Speaker 1: government came out with lots of very very hard label

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Speaker 1: or rules to benefit the unions and the workers and

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Speaker 1: all of that. Becker Mackenzie. Most of our clients were

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Speaker 1: international corporates or American companies that had invested in France.

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Speaker 1: And and I was really busy. So were there many

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Speaker 1: women lawyers in France in those days. No, no, no, no, no.

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Speaker 1: One of the reasons actually I joined Becka Mackenzie was

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Speaker 1: because the managing partner of the Paris office was a woman,

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Speaker 1: and she was then a role model for me. Now,

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Speaker 1: for those who don't know, Baker Mackenzie was for many

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Speaker 1: years one of the largest law firms in the world.

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Speaker 1: Because the largest, yes, and it was based in Chicago.

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Speaker 1: So at some point, how did you get to be

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Speaker 1: the head of the entire firm? You're a woman, it's

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Speaker 1: a male firm, more or less, you're from France. It's

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Speaker 1: a Chicago based American firm. So how did you get

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Speaker 1: elected to be the managing director of the entire firm

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Speaker 1: and moved to Chicago again. I'd love to think that

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Speaker 1: it's pure merits and and and quality of the work

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Speaker 1: I was doing. I think it's you know, it's interesting actually. Um.

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Speaker 1: So I became managing partner of the Paris office, and

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Speaker 1: gradually I was I was doing a decent job. I

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Speaker 1: was picked up by the nominating committee who was still

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Speaker 1: did me to join the executive committee, and I was

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Speaker 1: the first woman to be on that on that executive committee.

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Speaker 1: And then I went back to practice happily, but they

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Speaker 1: came back to get me. Um. By that time, it

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Speaker 1: was a mess. Um the i T budget was completely

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Speaker 1: out of out of order. The knowledge management system was

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Speaker 1: a complete disaster, and management was not really trusted. So

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Speaker 1: the nominating committee had a tough time selecting somebody. And

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Speaker 1: it's often in those situations that a woman arises. So

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Speaker 1: I was selected as chairman of the phone. Okay, so

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Speaker 1: you're the head of Baker Mackenzie. You're living in Chicago.

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Speaker 1: Was it like a foreign situation because you really were

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Speaker 1: living in the midwest of the United States. You're really

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Speaker 1: from France. Chicago is a fantastic city. Um. I had

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Speaker 1: lots of friends and I still have many of them today,

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Speaker 1: and I truly enjoyed my uh six years in Chicago.

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Speaker 1: All right, So you were doing that and all of

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Speaker 1: a sudden, Nicholas Sarkozy gets elected president of France. Did

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Speaker 1: you know him? It was just it was the year.

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Speaker 1: It was two years before that. It was Chirack was

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Speaker 1: still the president and Villepin, the Prime Minister was the

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Speaker 1: prime was was in charge, and he's the one who

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Speaker 1: called me. He called you to be Minister of trade. Yeah, okay,

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Speaker 1: so he called you to be Minister of Trade, and

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Speaker 1: you went back and you served as Minister of Trade

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Speaker 1: for a couple of years and how did you like

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Speaker 1: that job? I loved it. I really loved it. Um.

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Speaker 1: It was a massive change in my life geographically, socially,

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Speaker 1: financially as well. I assume the income was not the

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Speaker 1: same as you had. It was like divided by ten,

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Speaker 1: That's what it was. Um. But I loved it because

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Speaker 1: it was I think it was a job that I

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Speaker 1: most enjoyed in government, actually because I was selling France

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Speaker 1: around the world. And I think President Shirack he knew

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Speaker 1: that I was this strange animal coming out of private

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Speaker 1: sector and private life and corporate life. But I think

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Speaker 1: he had a lot of respect for me, and I

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Speaker 1: had huge respect for him. And then Sir Sarkozy does

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Speaker 1: get elected president of France. He asked me to be

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Speaker 1: Minister of Agricultulture, which I had no clue about, but

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Speaker 1: I was prepared to learn. But you did that for

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Speaker 1: just a few months. I did that for two months,

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Speaker 1: because then he asked me to become Minister of Finance.

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Speaker 1: I think he asked me to be Minister of agriculture

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Speaker 1: because he knew that it was going to be a

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Speaker 1: hot w T O potato and he wanted somebody who

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Speaker 1: was acquainted with difficult international Either did such a great

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Speaker 1: job your promoted for two months, or such a bad

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Speaker 1: job and for two months they said give her another job.

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Speaker 1: One of those two. Probably you did such a good job,

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Speaker 1: they gave you that and there was reshuffling caused by elections. Well,

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Speaker 1: you're the first woman to be a finance minister of

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Speaker 1: a major country in Western Europe. Yes, yes, I was.

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Speaker 1: I was the I was the first fundance minister for

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Speaker 1: G seven country and of you know, of many countries actually,

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Speaker 1: So you were a lawyer by training, um, and all

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Speaker 1: of a sudden you're in charge of the finances for France. Um.

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Speaker 1: Did you have any background or you're worried about not

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Speaker 1: having that kind of background or did your job before

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Speaker 1: as a minister of trade help you. I think the

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Speaker 1: whole background helped me. But I recognized right from the

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Speaker 1: get go that I was going to have to learn

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Speaker 1: enormously and and learn from the team from the Treasury Department.

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Speaker 1: I had to work very hard. Okay, So you did

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Speaker 1: a very good job there by all accounts, and then

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Speaker 1: I m F managing director position opens up. Did you

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Speaker 1: really want the job or did you have to be

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Speaker 1: persuaded to move back to the United States. It's you know,

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Speaker 1: so many things in my life happened sort of out

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Speaker 1: of the right timing, the right people, um, and my

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Speaker 1: sense of all right, let's try it, let's do it. Um.

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Speaker 1: You know, when I returned back to France as as

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Speaker 1: a as a minister, I had not thought for a

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Speaker 1: second about my pension, my compennsation, the reporting lines, how

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Speaker 1: would work out. I just I just wanted to do it.

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Speaker 1: I wanted to help the country as finance minister. I

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Speaker 1: don't think that I anticipated at all that two months

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Speaker 1: into the job the beginning of the financial crisis would

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Speaker 1: loom as a result of the closure of the two

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Speaker 1: BNP accounts. But you just rule your sleeves and and

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Speaker 1: and work and and and team up with people who

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Speaker 1: know what they're doing and who have a good moral compass.

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Speaker 1: I think it's combinational for that. Now you've done a

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Speaker 1: very good job at the imp by all accounts. One

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Speaker 1: of the things that you have to worry about is

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Speaker 1: not just countries that are not doing that way I

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Speaker 1: need some money, but the economy of the entire world.

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Speaker 1: Because your job is to help promote stability and development

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Speaker 1: and also employment how do you think we are better

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Speaker 1: prepared around the world for another financial collapse of the

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Speaker 1: type we had ten years ago. No, I think we're

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Speaker 1: a bit better prepared. We're better prepared because at least

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Speaker 1: in certain areas we've learned the lessons. When you look

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Speaker 1: at the bankings term, when you look at the ring

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Speaker 1: of supervisors, when you look at the set of regulations

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Speaker 1: that apply, I think that in that particular sector we

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Speaker 1: are much better prepared. You know, the banks around the

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Speaker 1: world are most solid capital ratio's, liquidity, ratio's leverage in

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Speaker 1: on all those fronts, I think we've made significant progress. UM.

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Speaker 1: There are areas though, because risks tend to to sort

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Speaker 1: of travel to the fringe. UM and if you look

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Speaker 1: at other areas, you know, asset management, pension funds, UM,

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Speaker 1: fintech developments, those are areas where I'm not sure that

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Speaker 1: we have the same the same added security that we've

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Speaker 1: developed in relation to the banking sector. Now, there are

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Speaker 1: other numbers that are much more worrying. When you look

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Speaker 1: at debt. The weight of debt on corporate, sovereign and

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Speaker 1: household has has gone up by virtue of the stimulus

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Speaker 1: and the indebtedness that had to develop as a response

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Speaker 1: the crisis. Now, when the Euro was created, it was

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Speaker 1: started by some at the time that it might become

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Speaker 1: a reserve currency. Why do you think it really has not.

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Speaker 1: I think because the job is largely unfinished. It's very advanced,

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Speaker 1: and I think the Great Financial crisis as has moved

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Speaker 1: the Euro and it's in its institutions in the direction

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Speaker 1: of consolidating, you know, with a stronger backstop, with a

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Speaker 1: stronger set of institutions, and with more unity amongst the

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Speaker 1: nineteen members of the EU Area. But the job is

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Speaker 1: not finished yet. Banking union is not yet completed, and

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Speaker 1: and there is still too much uncertainty in the fiscal

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Speaker 1: policies that should be common to all, or at least

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Speaker 1: to share the same objective. So let's talk about Brexit

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Speaker 1: for a moment. When do you think that will be resolved? Um?

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Speaker 1: I think we will know on on on March, because

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Speaker 1: that's the cutoff date. When either there is a brutal

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Speaker 1: exit which would be extremely costly and and detrimental to

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Speaker 1: both the UK particularly and the EU too to a

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Speaker 1: lesser degree, or there is an arrangement that deals with

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Speaker 1: the period of transition into this new regime which can

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Speaker 1: be a variation of free trade agreement between the UK

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Speaker 1: and the European Union, which can go from the Norwegian

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Speaker 1: model to the Swiss model to the Canadian model, and

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Speaker 1: which will have to respect one thing which is a

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Speaker 1: big redline for many, and that's the Irish border, which

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Speaker 1: was agreed in this Good Friday agreement. But if Great

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Speaker 1: Britain does get out of the EU, do you think

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Speaker 1: that will deteriorate the European economy in a significant way.

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Speaker 1: I think it will be um net negative in all cases.

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Speaker 1: The variability of net will depend on the brutality of

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Speaker 1: the exit. The more brutal, the more negativities, and I

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Speaker 1: think it will be in any circumstances most severe for

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Speaker 1: the UK, then it will be for the rest of

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Speaker 1: the European Union. And within the European Union you have

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Speaker 1: a few countries that will be more exposed than others,

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Speaker 1: those that deal frequently with the UK, such as Ireland,

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Speaker 1: probably Belgium, probably the Netherlands. So have you noticed that

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Speaker 1: when there's a very difficult problem, sometimes the men don't

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Speaker 1: want to do, which they give it a woman to do.

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Speaker 1: So you said it not me well that the Prime

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Speaker 1: Minister of Great Britain as a woman, and none of

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Speaker 1: the men seem to want to take that job because

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Speaker 1: they know it's a very difficult, no wind, no win situation.

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Speaker 1: Now they're probably prepared to come and take the job afterwards.

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Speaker 1: So yeah, probably the case. Okay, let's talk about another

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Speaker 1: part of the world, China. Do you worry about Chinese

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Speaker 1: growth going down? You have worried about Chinese debt or not?

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Speaker 1: Chinese growth has been going down regularly for the last

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Speaker 1: ten years or so. Remember the days when it was

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Speaker 1: a double digit So it's gradually come down. And every

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Speaker 1: time it was moving from a ten to a nine,

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Speaker 1: to an eight to and seven, there was always trepidation.

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Speaker 1: And I've heard so many times that China was going

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Speaker 1: to collapse. It hasn't collapsed. It has certainly held a

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Speaker 1: great deal at the global world economy at the time

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Speaker 1: of the financial crisis, because it was certainly one of

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Speaker 1: the first, if not the first, country to come out

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Speaker 1: with a huge package of stimulus in order to kick

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Speaker 1: start the economy. So, yes, it is heavily indebted. Um, yes,

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Speaker 1: they're trying to bring that in. But at the same time,

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Speaker 1: it's a country that has a huge population which has

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Speaker 1: massive transition issues to deal with, and we're um the

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Speaker 1: necessary reduction of growth that we're seeing by virtue of

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Speaker 1: the size of this economy now has to be monitored,

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Speaker 1: has to be under control in order to tame any

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Speaker 1: any risk of conflict. That that's how I see it.

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Speaker 1: What about the tariffs. President Trump has been talking about

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Speaker 1: imposing terroriffs and has imposed tariffs against and some other

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Speaker 1: parts of the world. Do you think that's a plus

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Speaker 1: for the global economy or you think it's not. I

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Speaker 1: think that tariffs are not a good idea in general

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Speaker 1: if they impact trade to the point that trade no

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Speaker 1: longer plays the key role as an engine for growth.

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Speaker 1: What do we see in the last third years. We

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Speaker 1: see trade growing faster than growth, so it's been a

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Speaker 1: driving engine for growth. We see lots of people taken

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Speaker 1: out of poverty. We see the cost of living in

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Speaker 1: advanced economies, including in the United States, lower by virtue

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Speaker 1: of cheaper refrigerator, cheaper television sets, cheaper telephones, and so

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Speaker 1: on and so forth, because they are made in countries

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Speaker 1: were cost so much lower. So there has been huge benefits,

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Speaker 1: not only benefits, but there have been huge benefits and

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Speaker 1: I don't think we can dispense of those benefits going forward.

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Speaker 1: So my take on that is fix it, don't break it.

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Speaker 1: Because trade needs fixing, there's no question about it. And

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Speaker 1: I think that President Trump has put the finger right

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Speaker 1: where it hurts. There are issues about the trade rules

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Speaker 1: and organizations that need to be addressed and dealt with.

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Speaker 1: Let me ask you this, Um, you have spoken about

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Speaker 1: the fact that women should be in corporate boards more

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Speaker 1: than they have been, core board boardrooms and CEOs, and

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Speaker 1: perhaps you think you've made a lot of progress, And

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Speaker 1: why do you think women should be more represented in

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Speaker 1: these positions. I think there's a very clear economic case

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Speaker 1: now that more moment on the board, more women on

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Speaker 1: the executive committees and management teams, actually generate better returns,

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Speaker 1: better results, and better profits. So if even if you

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Speaker 1: have a very very um cold heart, no moral imperatives,

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Speaker 1: and no sympathy for women and for the principle of

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Speaker 1: in inclusion, even if you were that person, you have

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Speaker 1: to consider including women and bringing them to the table

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Speaker 1: and to all the tables. Have we made progress? Some? Yes?

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Speaker 1: And when I look at numbers, it tells me that

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Speaker 1: we have made progress altogether. Do we still have a

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Speaker 1: long way to go. Yes, as well. Now, did you

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Speaker 1: experience a lot of discrimination because you were a woman

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Speaker 1: as you were rising up in your career and you

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Speaker 1: feel you're still experiencing it today. I did experience discrimination

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Speaker 1: from from the you know, the first day when I

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Speaker 1: interviewed with with law firms, where I was told back

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Speaker 1: in those days that I would never make partnership because

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Speaker 1: I was a woman, Or when I was regarded by

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Speaker 1: Japanese clients, for instance, in those days as as a

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Speaker 1: woman who can serve coffee, when I was actually a

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Speaker 1: practicing attorney, drafting contracts and negotiating for them. And and

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Speaker 1: they are still instances when you know, I walk in

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Speaker 1: a room full of men and I can just tell

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Speaker 1: that there is this little smile about their face, which

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Speaker 1: is either here she goes again, she's going to talk

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Speaker 1: about women, or I wonder what she has to say.

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Speaker 1: It's less so the case, for sure, But when you're

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Speaker 1: in a minority, that's what you experiment. What is the

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Speaker 1: greatest pleasure of being the head of the I m

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Speaker 1: F working with the teams, and what's the worst part

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Speaker 1: of it? Having to sit through meetings which endlessly repeat

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Speaker 1: the same things and end up nowhere. Okay, well, least

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Speaker 1: she didn't say interviews that asked the same questions. You're

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Speaker 1: nice enough not to say that. I'm sure you've been

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Speaker 1: asked these questions before. But just before we wrap up,

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Speaker 1: you've said you're going to finish your term here. When

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Speaker 1: you do finish, you'll still be relatively young by most standards.

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Speaker 1: So have you thought what you might do when you

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Speaker 1: finish your term at the I m F. No, I'll

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Speaker 1: come and talk to you, David. Okay, you'll give me

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Speaker 1: some good advice. Now, when you're in the head of

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Speaker 1: the I m F and you go to have let's say,

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Speaker 1: lunch or breakfast and a restaurant in Washington or other

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Speaker 1: famous cities, do people come up for selfies they bother you,

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Speaker 1: or you can kind of go where you want to

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Speaker 1: go without being bothered. No, No, I'm recognized you. They

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Speaker 1: recognized me. They ask for selfies. They are very most

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Speaker 1: of the time, they are very very nice and flattering

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Speaker 1: and complimenting and and some and and it's very nice,

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Speaker 1: and it's it's a lot of ego food which I

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Speaker 1: take and store for the hot days. Any regrets about

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Speaker 1: your career, No, No, regrets like Poff would say, Okay, well,

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Speaker 1: thank you very much for taking the time with us,

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Speaker 1: and thank you for the great job you're doing at

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Speaker 1: the I m F. Thank you, David