Christine Lagarde enters the European Central Bank at a perilous moment

The announcement last week that Christine Lagarde would be leaving her post as managing director of the International Monetary Fund to become president of the European Central Bank marks what may be the most important change in the leadership of the international financial system in decades. At a time when the United States is abdicating its systemic responsibilities and focusing only on narrow commercial interests, the role that Lagarde is leaving and the one she is entering are of preeminent importance.

Lagarde — unlike any of the others considered for leadership of the ECB — fits in more naturally with the group of European heads of state who meet regularly in Brussels than with the group of central bank heads who meet in Basel, Switzerland. This is a reflection of her extraordinary presence, political ability and experience with European affairs. It is also a consequence of the fact that, unlike most central bank governors, she is not an economist or experienced financial technocrat.