The world of international finance yesterday remained baffled by Rodrigo Rato's surprise decision to quit as managing director of the International Monetary Fund, as speculation began as to who might succeed him as head of the fund.

Some of the names floated in early conversations included: Mario Draghi, governor of the Bank of Italy; Andrew Crockett, former general manager of the Bank for International Settlements; and Jean Lemierre, president of the European Bank for Reconstruction and Development.

In the past, the job has always gone to a European, although pressure was beginning to build for a more open contest this time, which might include non-European candidates such as Arminio Fraga, the former governor of the central bank of Brazil; Trevor Manuel, finance minister of South Africa; Mohammed El-Erian, head of Harvard Investment Management; or Stanley Fisher, governor of the Bank of Israel.

Mr Rato has said he is stepping down for personal reasons relating to "family circumstances and responsibilities, particularly with regard to the education of my children".

However, experts, government officials and staff members said the timing of the move was surprising, given that he was in the midst of shepherding through a far-reaching reform at the IMF - which includes this month's decision to adopt a new surveillance framework, and difficult talks about a shake-up in the fund's shareholding formula.

Brussels officials said Mr Rato's resignation took them by surprise. Europe's finance ministers are expected to discuss successors at their final meeting before the summer break on July 10th. "It is very early to talk of names. We are talking about October and it is a complicated process," said one.

A spokeswoman for Joaquín Almunia, the Spanish monetary affairs commissioner, said he expected a European would take the post. "It is important that European countries find a successor rapidly who can take forward the important reform process started by Mr Rato," she said.

In Frankfurt, one name floated among European policymakers was that of Mr Draghi, a former vice-chairman of Goldman Sachs International. However, a spokesman for Mr Draghi said he was not interested in the job.

The Bank of England rejected suggestions that governor Mervyn King might consider becoming IMF chief. - (Financial Times service)