Dominique Strauss-Kahn has been arrested by US authorities for rape allegations. There is a very good chance he won’t be returning as the head of the International Monetary Fund (IMF). 

The race is on, then, to choose his successor.

The most pressing issues for the IMF right now is the European debt crisis. If a Western European politician replaces Strauss-Kahn, he or she will likely be able and willing to continue the IMF’s policy of bailing out peripheral euro zone members.

If a non-Western European replaces Strauss-Kahn, his or her ability and willingness to orchestrate the bailouts may be more limited.

Beyond the European debt crisis, the IMF’s key role is mediating the tensions between Western countries and emerging market countries. 

Points of contention include current account balances, excess liquidity (i.e. QE2), capital controls, IMF Special Drawing Rights, and more representation for emerging market countries.

Further down the road, any changes to the global currency regime will likely involve the IMF and its managing director.

One of the leading European candidates for the job is French Finance Minister Christine Lagarde (whose electon would make her the first female head at IMF).  

The strongest emerging market candidate is Montek Singh Ahluwalia, who is the deputy chairman of India’s Planning Commission and a former IMF and World Bank official. 

Turkey’s Kemal Dervis ( former head of the United Nations Development Programme ) could be considered a compromise choice between Europe and emerging market countries.

Americans aren’t considered for Strauss-Kahn’s post because an American already occupies the top World Bank position. 

China, even though it’s the second largest economy in the world, doesn’t seem to have a viable candidate for the job.

Below is a comprehensive list of possible candidates for the job. In all likelihood, though, the spot will probably end up going to Lagarde or a German.

Axel Weber – Germany

Peer Steinbrück – Germany

Josef Ackermann – Germany

Thomas Mirow – Germany

Mohamed El-Erian – French/Egyptian

Arminio Fraga Neto - Brazil

Augustin Carstens – Mexico

Stanley Fischer – Israel

Trevor Manuel – South Africa

Tharman Shanmugaratnam – Singapore

SaKong Il – South Korea

Haruhiko Kuroda – Japan