'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.