World Bank appoints financial crises expert Carmen Reinhart as chief economist and VP

The Harvard Kennedy School professor will join the Washington-based lender on June 15

Carmen Reinhart, a former IMF executive, is a well-known author and an economist. Bloomberg  

The World Bank appointed financial crisis expert Carmen Reinhart as its new vice president and chief economist, leaning on the expertise of the former International Monetary Fund executive as the Covid-19 pandemic plunges the global economy into the deepest recession since the Great Depression.

The former Bear Stearns chief economist will begin her role at the World Bank on June 15, the Washington-based lender said in a statement on May 20.

"Carmen has dedicated her career to understanding and surmounting financial crises in both advanced and developing economies in order to achieve growth and higher living standards," David Malpass, the World Bank's president, said. "Her thought leadership during this unprecedented period will be invaluable to the Bank Group and our clients.”

Ms Reinhart will join the World Bank at a time when the organisation estimates that up to 60 million people will be pushed into extreme poverty while a deep recession this year will shrink the global economy by 5 per cent, Mr Malpass remarked in a May 19 media call. The lender has deployed emergency assistance to 100 countries - or 70 per cent of the world's population - to fight the impact of Covid-19. The move is part of its pledge to provide $160 billion (Dh587.6bn) in grants and financial support over a 15-month period to help developing countries respond to the health, social and economic impacts of Covid-19 and the economic shutdown in advanced countries.

IMF managing director Kristalina Georgieva called Ms Reinhart a "great choice, especially at this time of crisis - something Carmen knows a lot about", in a tweet.

The fund's chief economist Gita Gopinath tweeted her congratulations and called Ms Reinhart an "extraordinary economist with deep expertise in crises, debt, capital flows, from a current and historical perspective".

Ms Reinhart is co-author with Harvard professor Kenneth Rogoff of the award-winning 2009 book This Time is Different: Eight Centuries of Recurring Financial Folly, which has been translated into 20 languages.

The book has been widely praised, with Allianz economic adviser Mohamed El-Erian calling it a "must-read for anyone looking to understand past and present crises, as well as navigate those of tomorrow".

Ms Reinhart, who holds two master's degrees and a doctorate from Columbia University, has been the Minos A Zombanakis Professor of the International Financial System at Harvard Kennedy School since July 2012.

"Carmen Reinhart has reshaped the way that both scholars and practitioners think about the international financial system,” said Kennedy School Dean Douglas Elmendorf, an economist and former director of the US Congressional Budget Office. "She will make a powerful contribution to the World Bank’s ability to help people, communities, and countries that are struggling with the pandemic and its myriad consequences.”

Ms Reinhart's areas of expertise are international capital flows, finance, and macroeconomics, and she has published work focusing extensively on economies in Asia and Latin America, banking and sovereign debt crises, currency crashes, and contagion, according to the World Bank.

She was senior policy adviser and deputy director at the IMF and vice president and chief economist of the investment bank Bear Stearns. She currently serves on the advisory panel of the Federal Reserve Bank of New York and was a member of the Congressional Budget Office Panel of Economic Advisors.

Ms Reinhart has been listed among Bloomberg Markets Most Influential 50 in Finance, Foreign Policy’s Top 100 Global Thinkers, and Thomson Reuters' The World's Most Influential Scientific Minds.