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How does the IMF choose a successor to Dominique Strauss-Kahn?

The fight for the leadership of the International Monetary Fund has intensified after a day that saw investors dump Greek bonds amid concerns of a damaging policy vacuum. Here, we look at how the Fund choses its next chief.

Who is running the IMF now?

John Lipsky, the first deputy managing director at the IMF, stepped up as acting head of the fund shortly after Mr Strauss-Kahn was charged on Sunday. Mr Lipsky, who is American, has been the fund's No 2 since 2006 when he returned to the IMF after almost 20 years working as an economist on Wall Street and in the City of London for Salomon Brothers and then JP Morgan Chase. He currently has responsibility for the IMF's 3,200 staff, 2,600 whom are permanent. He's supported by two deputy managing directors - Naoyuki Shinohara from Japan and Nemat Shafik from Egypt.

Who is handling the negotiations with Greece and the European Union?

Strauss-Khan played an important role in negotiations with Greece and, having stepped up, Lipsky now has ultimate responsibility for the IMF's policies in Greece. However, the IMF has had a team in the country for more than a year led by Poul Thomsen, who is deputy director of the IMF's European department. Mr Thomsen this week urged the Greek government to speed up its economic reforms.

Who makes the decision on who will be the next leader of the IMF?

The official decision will be taken by the IMF's executive board and announced from its headquarters in Washington DC. The board is made up of 24 directors from member countries, ranging from Indonesia to Gambia, and it typically meets several times a week. But the board will only rubber-stamp a decision that's been agreed in the capitals of the biggest contributors to the fund – the US, Germany, France and Britain. However, China, which accounts for about 4pc of the IMF's capital, and other major, developing economies will also have an important say.

Why has the head of the IMF always been European?

It dates back to an agreement struck when the IMF was created along with the World Bank in July 1944 at Bretton Woods. Under the unwritten accord, a European gets to lead the IMF and an American heads up the World Bank. It has since delivered four Frenchmen, two Swedes, a Dutchman, a Belgian, a German and a Spaniard to the top job. The World Bank, in turn, has had lots of Americans.

What are the chances of the IMF's new boss coming from outside Europe?

It's highly unlikely to be an American, so you're looking at Asia, South America or Africa. There are plenty of strong candidates. Whether it happens will depend on whether emerging economies can quickly unite around one candidate, and whether the White House is prepared to break with tradition and shift its support away from a European.

Is the process always amicable?

No. In 2000 there was a bitter and protracted contest in which the US objected to the European nominee, German finance official Caio Koch-Weser. After open disagreement and a great deal of transatlantic tension, Germany withdrew Mr Koch-Weser’s candidacy and instead nominated Horst Köhler, who served as managing director until 2004.