>> Christine Lagarde is one of the most influential women on the planet, with the power to lend a trillion dollars to governments around the world.

The Managing Director of the International Monetary Fund this week on "Firing Line."

>> "Firing Line with Margaret Hoover" is made possible by... Corporate funding is provided by... >> 10 years ago, the 2008 financial crisis shook the globe.

A contagion that originated on Wall Street, that toppled governments and seemingly invincible institutions around the world.

Then, the #MeToo movement upended the way society approaches women's roles in the workplace.

The confluence of these events has caused my guest this week to quip that if Lehman Brothers had been Lehman Sisters, none of it would have happened.

And as the eighth most powerful woman in the world, according to Forbes, when she quips, people listen and markets respond.

Madame Christine Lagarde, Managing Director of the International Monetary Fund, lives and works at the intersection of these earth-shattering trends.

With 189 member countries, under her leadership, the IMF provides policy advice and financing to countries in economic crisis and works with developing nations to achieve macroeconomic stability and reduce poverty.

Among her charges and passions is helping to close the gender gap in finance and in work while confronting the emerging challenges of automation that risk imperiling women most.

Madame Lagarde, welcome to "Firing Line."

>> Thank you so much.

>> For those who are less familiar with the work of the IMF, can you establish for our audience what the IMF is and what it does?

>> A teeny, tiny bit of history.

Back in 1944, leaders of the world, led in particular by the United States, decided that it was not worth having a third world war and decided that international financial stability was key in order to avoid that, and that development was a determining factor.

So they established two institutions, called the International Monetary Fund and the World Bank.

The International Monetary Fund has three business lines.

The first one is to audit economies around the world and to alert policymakers when there is a risk on the horizon that they don't see.

The second is to, as you said, provide financing for countries that have a balance of payment crisis.

They can't pay their debt.

And we provide financing And to do that, we say, "Fine, but you're going to have to restore your public finance management, you're going to have to improve your situation, you're going to have to do reforms in order to regain your sovereignty and not need the International Monetary Fund anymore.

And the third line of business is technical assistance, and we help with anti-money-laundering, with combating the financing of terrorism, with helping countries run their debt management, designing their tax system, and so on and so forth.

>> The International Monetary Fund played a critical role in the time after the 2008 financial crisis.

>> Yeah.

>> But you did have this wonderful quote about the financial crisis, and if Lehman Brothers had been Lehman Sisters, the history would have been a bit different.

Can you tell us what you meant by that?

>> You know, it may have been influenced by the fact that I was the only female finance minister in the world.

And seeing those rooms full of men trying very hard to solve issues made me think that, if it was a little bit more diverse, if it was a little bit more mixed composition, maybe we would reach different conclusions.

And I think this is very true in the financial world.

When you looked, in those days, at the banking sector, trading floors, it was vastly dominated by men.

And nothing against them -- don't get me wrong -- but I think women bring different skills, a different approach, and diversity, in and of itself, because it challenges the way in which people think, is actually valuable at a time when you have to evaluate risks and you have to make decisions.

That's why I said that.

It would have been a different story if there had been more sisters than brothers.

>> So, not so much that women are better at running financial institutions but that the diversity that women bring to the table prevents the groupthink.

>> Correct.

That's absolutely the case.

And we've just completed a study on that front which clearly shows that when there is diversity and when there are women in board, in executive teams, then the stability of these institutions is better.

>> Is it just that their diversity prevents the groupthink, or is there something inherently different about the women -- the way women approach finance that, in its difference, makes them have added value?

>> Both, both.

I think that the diversity factor, in and of itself, is critical to challenge the conventional wisdom that groupthink eventually produces.

But women also develop and bring to the table their own perception, their own assessment of risk, their own sense of stability needs.

And, you know, I've been a witness to that in many instances, but I think, now, research corroborates what seemed to me anecdotal but which is true.

>> You've said that you think women are better managers of risk.

They tend to have a slightly different approach.

The approach to risk is different and, I think, is a good mitigating factor to other, sometimes more men-dominated risk approaches.

Yeah.

>> Are women better managers in crisis?

>> Ha.

You take me to a destination that I firmly believe in, actually.

If you look at those countries or institutions in crisis, it's very often the case that, when there is a really messy situation, the women are called in.

And women volunteer, because they see the opportunity.

Because as a result of being a minority, they're usually the best in their group.

And I have seen many instances where, in times of crisis, women come in, try to sort out the mess, and then, eventually... phase out... >> Why are -- >> ...disappear, and men come back.

I don't know.

>> Do you think it's because they've been in the minority and so, because they have been able to stand out amongst their peers as a minority, they've developed a certain set of skills that makes them better at managing a diverse set of challenges?

>> I think belonging to a minority either represses you, which happens sometimes, or builds your resilience and develops your strength.

And in the latter case, you end up with women who have the courage to say, "This is a mess.

We need to sort it out.

Let's roll up our sleeves and do it together.

>> The IMF has produced several studies, but get to this notion of financial inclusion.

First, for the audience, can you please define what you mean by financial inclusion?

>> I'll give you the example of a woman that I met in Peru, in the high plateau of Peru.

Maximilliana.

The whole family had been disseminated by terrorism.

She was left on her own, and she was growing guinea pigs in order to make a living.

If it hadn't been for financial inclusion, if it hadn't been for mobile banking and the little card that she was carrying with her that that attested the transactions that she was conducting, selling her guinea pigs, she would not have been able to, you know, have a living, to survive, and to contribute to the economy.

That's what financial inclusion also means.

>> So it means women who can have bank accounts, who can become depositors and borrowers.

What are the barriers to that happening now?

>> I was really surprised to see that legal obstacles are to be found in 90% of our membership.

Would you believe that?

Out of 189 countries, 90% of them have, in their constitution or in their laws, their legal system, barriers against women.

>> Women participating in the financial systems of their country.

>> In the financial system, in the inheritance system.

There's a big debate going on at the moment in Tunisia where women should have the same inheritance right as men when -- You know, a daughter and brother see their parents go, they should be in the same position.

Not the case at the moment.

There are still countries where a woman will not join the job market unless the husband agrees and accepts that the wife actually goes to work.

There are fiscal rules that are really, generally, an obstacle to women's joining the market, as well, and being economic players.

I mean, I could go on and on.

>> So, then, in your role at the International Monetary Fund, do you have methods -- carrots, sticks -- ways of encouraging countries to increase their financial inclusion with women?

>> You know, I believe in numbers.

And when I see a prime minister and I explain to him that, by having the same female labor-force participation, by including women in the financial net of the country, there is going to be higher growth, and there is going to be a stronger economy.

That is convincing.

If you look at just -- The one that is easy to measure is female labor-force participation.

If you had the same participation for men and women in a country like the United States, GDP would be 5% higher.

In Japan, 9% higher.

In India, 37% higher.

And Egypt, same page.

So, everybody wants more growth.

>> Right.

>> Companies, countries.

And if the opportunity's there by doing some very simple things, like revisiting a little bit the policies available for childcare centers, for maternity leave, for the tax definition of a household, and you can encourage and help women join the economy, be integrated in the financial sector, and, as a result, generate more prosperity and more productivity, the better.

That's convincing.

>> I mean, it is convincing, and yet... >> And yet... >> ...if it's so convincing, why is it, do you think, that 90% of the member countries have laws that prohibit it?

>> [ Breathes deeply ] I think there are cultural barriers.

There are religious barriers in some corners of the world.

And we have to make people understand that this is not -- not a very economically sensible approach.

>> Is it that economic growth might, in some cases, require cultural change?

>> True.

>> And do you, from your position in the IMF, use your ability, your lending powers, to influence countries or cultures in that direction?

>> We are a financial institution, but there are areas where the economic gains to be had from measures actually justify that we recommend to a country to spend some budget on making transportation safer for women when they go from home to work, as we did in the Egyptian program, for instance.

Or ask for specific measures intended to improve childcare centers in particular countries.

Japan -- the prime minister of Japan actually listened very carefully to all those policy recommendations and set for the business community of Japan the objective of integrating 1 million more women on the job market, and that succeeded.

>> Are there critics that suggest that this -- that exporting these values -- these are Western values -- even if they lead to economic growth, this is cultural imperialism?

>> You know, the emancipation and the freedom of all individuals, including women, is no imperialism.

>> I happen to genuinely agree with that, and it seems to me that human rights are women's rights and women's rights are human rights, but there is a backlash on the left that there is an accusation that these values are forcing one sense of cultural sensibilities onto another.

>> I would say, "Get real," and have a look at the actual, real situation of women, who are oppressed, who are repressed, and who could thrive if they had a chance.

>> There's a sense in the Western world -- and I think this is the case, and it seems to me that you also think this is the case -- that there is a responsibility of women in the Western world who enjoy these freedoms and this economic mobility and freedom to extend those freedoms to women in other parts of the world that don't have it.

>> Yes, and this justifies the work that I do and the focus that I have on women, because, in many ways, in many of the advanced economies, women have a pretty comfortable situation relative to the low-income and developing countries, where women effectively carry the water, where women effectively are denied access to education, where women effectively do not have the healthcare that they need when they give birth.

So, yes, we also, in our advanced economies, have to prove our case over time and to push barriers and to make sure that everybody can thrive, but we also have to help those that have even less space and freedom and opportunities than we do.

>> I mean, the challenge it seems, to me, at least with the IMF and that we can achieve in your lending practices is to convince people that this isn't a zero-sum game... >> Absolutely.

>> ...that by investing in women and girls, everybody benefits.

>> You are spot on.

Investing in women and girls is a benefit to all, not just to women and girls.

For sure.

>> This program, "Firing Line," aired on public television for 33 years and was hosted by a prominent voice and personality of the modern American conservative movement, William F. Buckley, who invited Clare Boothe Luce, a politician and a former ambassador and a prominent voice in the American feminist movement from the conservative side, to talk about feminism and the role between men and women, especially in the workplace, here on this program.

I'd like you to react to something she says.

"When men figure out that discrimination against women costs them more than it's worth."

And she thinks that will have been a long time.

Are men beginning to figure it out?

>> I think some of them do.

I know when I see my sons, when I see their friends, I think those millennium kids understand better the value of each and every human being, and I hope that it continues at their level.

I have huge faith in the young generation.

>> I do, too.

I do, too.

Still, the highest levels of corporate finance, especially in the United States -- 47% of the United States workforce is women, and yet only 17% of its corporate boards are represented by women.

We've talked about the lower rung of the economic scale, but on the higher rung of the economic scale, there is not parity with men and women.

>> No.

>> You are now for quotas after having been against them for some time.

>> Yeah.

>> Why?

>> Well, I look at numbers again.

And, you know, if you just look at the financial system at the moment, only 2% of CEOs in banks are women -- 2%.

If you look at the executives in banks, 20% only are women.

So that's clearly an underrepresentation and, you know, a waste of talent, because they are out there.

The moment I became pro quota was when I became a partner at Baker & McKenzie, and I realized -- which was, you know, the largest international law firm, headquartered in Chicago.

And I looked around, and I saw that there was about 9% of female partners.

And I looked at the demographics of young women yet to come, and I thought, "My goodness.

It's going to take at least 70 years for us to reach maybe 25%."

So that really made me completely change my mind and think that we need just to jump a big step.

And then, once that has taken place, we can maybe remove quotas and thrive on our own merits -- all of us, respectively, men and women.

But the gap is so huge in some industries that there has to be a quota and there has to be proper quotas, not just, "Oh, let's go for 50/50."

Because then you have a lot of assistants who sort of dilute the purpose that you have, which is to have 50% eventually throughout the organization.

So when I say quotas have to be smart, they have to be distributed along the hierarchy of any organization.

>> But when you say "proper quotas," and we're talking proper quotas for corporate boards and female participation and parity, is there a proper way for them to be implemented?

In other words, should it be mandated by governments, or should it be incentivized by governments?

Do you have a view about the best way to install them?

>> I think that's where culture comes into play.

There are areas of the world where recommendations, peer pressure, the strength of the business community, is going to have a huge impact.

There are other corners of the world where you need the regulatory framework and the compulsory regulations, if you will, to make a change.

And...I don't think it's a one-size-fits-all.

I think what matters is that output be measured and that there be a sense of, "Okay.

How much have we progressed since last time we set quotas?"

And it can be incremental over the course of time, because I have -- You know, I'm not naive.

You don't go from 9% to 50%.

And in the law firm that I eventually became the chairman of, we went from 9% to 17%, and now they are north of 25%, which I'm really delighted about.

It's a gradual process, and every country is going to have to look at its fundamentals, look at its demographics, and decide what is going to be the best way to progress, to generate productivity, to generate growth, and to improve diversification.

>> The governor of California right now, on his desk, has a bill that he's trying to figure out whether he'll sign in the next week or not.

And it mandates quotas for California-based corporations to have, within a year, at least one woman on the board or face a $100,000 fine, and then, in two to three years, have two or three women on the board or face a $200,000 or $300,000 fine.

Is this the kind of -- >> I think he should sign right away.

Because if I look at what happened in my home country in France, which is -- you know, which is attuned to regulations and laws and requirements and compulsory things that are set centrally.

Not all countries are like that.

But when the law is passed to have 20% of women on the board by a certain time, before that certain time, board of publicly quoted companies suddenly found women, which they said they couldn't find before.

So...yeah.

>> There is an IMF study that says that countries that have laws on the books that protect women against harassment and particularly women against workplace harassment, are predisposed to have better financial inclusion.

>> Yep.

>> And I think about you, personally, and your experience, having come into your job after your predecessor, Dominique Strauss-Kahn, had his own run-in with the law here in the United States, having been accused, allegedly, of having raped a maid here in New York City and then had a series of incidences of sexual predation on women that he fought in court and -- >> Successfully.

>> That he did successfully fight in court.

But fast-forward seven years -- we now have a #MeToo movement that is fighting back against men using their positions of power against women in the workplace negatively.

Do you think that the #MeToo movement reflects a real cultural shift in the same way we've been talking about cultural changes in these other economies?

Does it reflect a real cultural change in developed countries, in your view?

>> I think it does.

I think it does.

And it gives a voice to... to women who kept things inside themselves who did not want to speak up, who suffered and kept that bottled up inside.

And, you know, the more we men and women can talk about those issues and identify what is perceived as invasion of my territory, which somebody else may not understand is actually an absolute necessity and a plus.

I'll give you an example.

At the IMF, we have about 140 different nationalities in the staff.

There are staff members -- female, for instance -- from Asia who regard their territory as everything around them.

So if you intrude in that territory, it's not defined as sexual harassment by the law in this country, but they feel very uncomfortable.

Now, you take a European man in my country, for instance, he would not regard tapping a woman on the back as an intrusion in her territory.

So, we need to get to the bottom of those issues.

This is a little bit on the surface, and there are far more difficult issues that have to do with sexual harassment, with violence against women, which is a huge, big topic.

But it's deep, it's multicultural, it's dual-gender, and it needs to be talked about.

And we can still, you know, have a good, solid working relationship with each other, but I think that the privacy space, the respect, and the tolerance that is needed has to be talked about, yes.

>> Much about talking about it and much of the #MeToo movement has been really characterized by women telling their stories... >> Mm-hmm.

>> ...and women taking the courageous step of sharing their #MeToo experience so that other women then have the inspiration and the courage to come forward and share theirs.

Have you ever shared your #MeToo story?

>> Um... Not all of them.

[ Chuckles ] But I don't have many stories, because I'll tell you something, I'm 5'10", and to be able to sort of tower over some of those men has actually protected me in many circumstances.

>> Does that mean that you're, even though a woman and in a very powerful position, that you've never been in a position of vulnerability with men trying to lord their power in the workplace over you?

>> Yes, I have.

In some occasions, I have, yes.

But as I said, you know, being tall and strong and quite athletic has, I think, protected me in quite a few instances.

>> Do you encourage women to share their personal stories?

Do you think that's useful?

>> I think it's a private matter for each one of us to decide and to...feel comfortable about.

>> In this country, we have some 200-plus women running for office in this election cycle, and that seems to be one answer for the #MeToo movement to be constructively channeled.

There's another, and I'd like to get your reaction to this, because there is an amendment to the American Constitution the Equal Rights Amendment.

And this would simply codify into law, into the Constitution of the United States, that men and women are created equal and have equal access to all the laws and protections in this country.

It is entirely possible in this country that we're now one state shy of ratifying a new amendment to the Constitution which would codify the equality of men and women into it.

Would you support an Equal Rights Amendment to the American Constitution?

>> You know, I'm a French national, so my voice doesn't really matter at the end of the day, but if I were, and being a lawyer by background and knowing how important your constitution is, as my constitution is in my own country, I think it would be a fantastic progress, yes.

>> Thank you for the work that you do with women and girls in financial inclusion around the world, and thank you for your leadership for women around the world.

>> Thank you so much.

>> Thank you.

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