Christine Lagarde, the first woman to lead the IMF, is a 55-year-old former corporate lawyer who two years ago was named by the Financial Times as the best finance minister in the euro zone.
By giving the top job to her the IMF has continued the tradition of having a European head the global lender.
The race has been one of the most hotly contested succession battles in IMF history and its board directors, who represent the fund’s 187 member countries, were keen that it should be a consensus decision rather than a formal vote.
During visits to world capitals Lagarde worked hard to reassure powerhouse emerging economies such as Brazil, China and India that they will have a bigger stake in decision-making at the IMF. They had complained that they are under-represented.
The first task for the fund’s new managing director will be immediate decisions on further bailout money to keep Greece afloat.
Her rival for the IMF job – Mexican central bank governor Agustin Carstens – had tried to use against her the suggestion that Lagarde might be too close to events in Europe to offer objective advice as head of the IMF.
He had argued that he would be a fresh pair of eyes on Europe’s debt crisis.
Never elected to political office, Lagarde became France’s first female finance minister in 2007, having been the trade minister for two years before that.
She successfully handled France’s role in the 2008 financial crisis and the country’s presidency this year of the G20 leading economies.
Some IMF board directors have expressed concern over an unresolved legal investigation into Lagarde’s role in a 2008 arbitration payout to Bernard Tapie, a French businessman with a criminal record who is close to President Nicholas Sarkozy.
A top French court has put off a decision on the matter until the July 8.
An IMF board source has suggested that because of that situation it is possible that Lagarde will not be offered a formal IMF contract until the court has made a final decision.