(Bloomberg News) The International Monetary Fund turned to John Lipsky when it was ordered toe develop an early-warning system to prevent a repeat of the 2008 financial meltdown. Now, the IMF is calling on him to guide it through its own crisis.

Lipsky, 64, was named acting managing director yesterday after the fund's chief, Dominique Strauss-Kahn, was charged with attempted rape and a criminal sex act on a New York hotel maid. Lipsky, who has been first deputy managing director since 2006, takes temporary leadership of the Washington-based IMF as it tries to stem the European sovereign-debt crisis and deal with Greece's request for a bigger financial lifeline.

Lipsky, who once served as chief economist at JPMorgan Chase & Co. and Salomon Brothers Inc. in New York and represented the IMF in Chile, is described by colleagues as a steady hand who can give the fund some stability in the aftermath of Strauss-Kahn's arrest. His promotion came three days after the IMF said he would be leaving when his term as the No. 2 official ends on Aug. 31. That could result in an "awkward period," said Eswar Prasad, a senior fellow at the Brookings Institution in Washington.

"He can carry the ball effectively for the next few months, but I wouldn't count on anything more from him," said Prasad, who worked with Lipsky as division chief of the IMF's financial studies division. Given Lipsky's plans to leave, he's unlikely to push any "major initiatives," Prasad said.

IMF spokesman William Murray said Lipsky wouldn't comment on his new appointment.

Held Without Bail

Strauss-Kahn was ordered held without bail by a New York judge today. He didn't enter a plea. Strauss-Kahn has denied the charges and will plead not guilty, his lawyer, Benjamin Brafman, has said.

European finance ministers will tackle Greece's financing needs at meetings in Brussels today. Also on the agenda are the approval of 78 billion euros ($110 billion) in aid for Portugal and the nomination of Bank of Italy Governor Mario Draghi to be the next president of the European Central Bank.

In late 2008, the Group of 20 finance ministers asked the IMF to develop a so-called Early Warning Exercise. The effort "assesses low-probability but high-impact risks to the global economy and identifies policies to mitigate them," the IMF said in a fact sheet last month.

Lipsky was a leader of the effort, emphasizing the importance of specifically identifying potential hazards.

'Identifying Vulnerabilities'

"I do not mean that the IMF should enter the crisis- prediction business -- as this potential role already is filled with an army of prognosticators -- but rather to undertake a more focused job of carefully identifying vulnerabilities and risks, and proposing specific remedies," he said in a December 2008 speech to the Council on Foreign Relations in New York.

For example, special investment vehicles that banks including Citigroup Inc. used to remove risky assets from their balance sheets "should have been flagged and dealt with before they caused the crisis," Lipsky said in the speech.

Lipsky's experience in crisis management and prevention "makes him uniquely qualified to help resolve the European sovereign debt" problems, said Miranda Xafa, a senior financial strategist with IJ Partners SA in Geneva and a former IMF deputy executive director. That experience includes his role in coping with the Latin American debt crisis of the 1980s, Xafa said.

Lipsky was forced to negotiate delicate situations as long as three decades ago, when he was the IMF's resident representative in Chile from 1978 to 1980, during General Augusto Pinochet's military dictatorship.

Role In Chile

"This was a difficult period in Chile and he really managed things well," said Claudio Loser, former director of Western Hemisphere Affairs at the IMF. "The fund was very involved in the economy and he did well without compromising the position of the fund."

Martin Redrado, former president of Argentina's central bank, has followed Lipsky's career since both worked at Salomon in the 1980s.

"He was and is a very talented economist, probably one of top in the world right now," Redrado said in an interview in Buenos Aires.

Lipsky was Salomon's chief economist in the 1990s after working in London as head of the firm's European Economic and Market Analysis Group.

He worked at the IMF for 10 years before joining Salomon in 1984, and helped lead the fund's exchange-rate surveillance and analyzed global capital markets. He received a bachelor's degree from Wesleyan University in Middletown, Connecticut, and a doctorate in economics from Stanford University near Palo Alto, California.

Doesn't Seek Limelight

Unlike Strauss-Kahn, Lipsky is "low-key" and doesn't seek the spotlight, said Prasad, who described him as "capable" and "methodical."

Tom Block, a consultant and former head of government relations for JPMorgan, said he found Lipsky to be "very plugged into senior policy officials at Treasury, IMF and the Fed" when they were both working at the bank.

When the IMF announced May 12 that Lipsky would be leaving his post at the end of August, it also said he would stay on as a "special adviser" through the G-20 summit in November at the request of Strauss-Kahn, 62.

He was appointed by Strauss-Kahn's predecessor, Rodrigo de Rato, at a time when the IMF was criticized as irrelevant. That was before the worldwide financial panic triggered by the bankruptcy of Lehman Brothers Holdings Inc. in September 2008.

Since then, the fund had its resources tripled by the G-20, has helped rescue economies from Ukraine to Greece and was assigned by leaders a host of new missions that prompted the institution to raise its budget last month.

"He may not be by nature a politician," said Loser, the former IMF official, of Lipsky, whom he has known for at least 35 years. "But this may be a very good thing for the fund at this time."