WASHINGTON (Thomson Financial) - World Bank governments said the pay scandal engulfing its president, Paul Wolfowitz, is a matter of 'great concern'.
In their communique at the end of today's meeting, the development committee said it has to ensure that the bank can 'effectively carry out its mandate and maintain its credibility and reputation as well as the motivation of its staff'.
The current situation is 'of great concern to all of us', it added.
'We endorse the board's actions in looking into this matter and we asked it to complete its work,' it said.
'We expect the Bank to adhere to a high standard of internal governance,' it added.
While the weekend meeting has featured much talk of currency volatility, trade liberalization, institutional reform and hedge-fund regulation, it was the fate of Wolfowitz -- and by extension the World Bank -- that has concentrated minds.
The 63-year-old bank chief is under fire from staffers and advocacy groups clamouring for his resignation after revelations he helped arrange a hefty pay hike for his partner, former World Bank press officer Shaha Riza, when she was transferred to the US State Department in 2005.
His future is now in the hands of the bank's 24-member executive board and Wolfowitz, who has admitted that mistakes were made in the promotion procedure, has pledged to abide by the panel's decision.
But the fear now in World Bank circles is that the turmoil will undermine the institution's core anti-poverty lending and development activities. pan.pylas@thomson.com pp/pp/vs COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.