UPDATE 2-IMF names U.S. Treasury official to No. 2 job, replacing Lipton

David Lawder

(Adds comments from former IMF official, U.S. Treasury secretary)

WASHINGTON, March 12 (Reuters) - International Monetary Fund Managing Director Kristalina Georgieva on Thursday nominated U.S. Treasury official Geoffrey Okamoto as her top deputy, replacing longtime economist David Lipton in the key policy role.

The appointment, which was backed by U.S. Treasury Secretary Steven Mnuchin, is subject to approval by the IMF's Executive Board, the Fund said.

Okamoto, 35, currently serves as Treasury's acting assistant secretary for international finance and development, where he coordinates U.S. participation in the G7, the G20 and the Financial Stability Board, and oversees U.S. interaction with the IMF, the World Bank and other institutions.

He joins the Fund at a time when the rapid spread of the coronavirus is putting immense economic pressure on many of its 189 member countries.

The number two official has always been chosen by the U.S. administration, part of a tradition that has kept a European in the top leadership role at the Fund since its founding at the end of World War Two.

Lipton, the Fund's longest-serving first deputy managing director, was appointed by former president Barack Obama in 2011.

His departure was announced in February by Georgieva, a Bulgarian economist who took leadership of the Fund in October, as part of her first major management shake-up.

Georgieva said in a statement that Okamoto played a key role in talks to preserve the size of the IMF's lending resources during a recent shareholding review. These talks failed to update the IMF's shareholding structure but resulted in a deal to double the size of its crisis lending fund.

"I have come to know Geoffrey from his time leading U.S. Treasury's engagement with the IMF and representing the U.S. internationally. I value highly his knowledge, diplomacy, and the good judgment he brings to tackling difficult issues," Georgieva said in a statement.

Unlike many past officials in the IMF's top deputy role, including Lipton and predecessors John Lipsky and Stanley Fischer, Okamoto has less experience in the field and does not hold a doctorate in economics.

He holds a masters degree in public policy from Georgetown University and, prior to joining Treasury in 2017, worked as a Republican aide on the U.S. Senate Banking and House Financial Services committees.

Eswar Prasad, a trade professor at Cornell University who formerly headed the IMF's China department, said Okamoto's appointment "would be a significant step down" from his predecessors.

"It does not augur well for the intellectual leadership the institution needs at this complicated time in the world economy," Prasad said.

But Mnuchin, in a statement issued on Wednesday, said Okamoto "has played a key role in the some of the most consequential trade, development, and international monetary policy issues facing our nation and the world," including a leadership role in U.S.-China trade negotiations.

Okamoto said he holds IMF staff "in the highest possible regard," and is looking forward to building on his experience "to help further strengthen cooperation between the Fund and all its member countries." (Reporting by David Lawder Editing by Sonya Hepinstall and Rosalba O'Brien)