(Updating to add further details)
WASHINGTON (Thomson Financial) - Embattled World Bank president Paul Wolfowitz said he intends to carry on doing his job despite mounting pressure on him to resign in the wake of a pay scandal involving his girlfriend.
Wolfowitz told reporters here after the bank's spring meeting that he has important work to do and 'I intend to continue with it'.
'We intend to abide by a high standard of internal governance here at the bank,' Wolfowitz said, adding: 'It's a serious issue.'
He said he would abide by the decision taken by the 24-member executive board. The talk is that the board is split between European governments, which have long been suspicious of the former US deputy defense secretary, and a camp of Wolfowitz backers that includes the US, Japan and some African countries.
The World Bank's Staff Association was adamant that Wolfowitz is no longer fit to lead an organisation whose mission, among other things, is to tackle corruption in the countries it seeks to help.
'He must resign,' said Alice Cave, chair of the Staff Association.
'We do not see how he can possibly regain the trust of the staff; we do not see how he can regain the credibility that has been lost for the World Bank,' she told reporters outside the IMF building.
She also pointed out that the scandal has already been undermining the World Bank's work as it has been detracting attention away from the development issues discussed this weekend.
Earlier, the World Bank's Development Committee said the pay scandal engulfing Wolfowitz is a matter of 'great concern', and added that 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 meetings of the International Monetary Fund and the World Bank have 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.
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/vs/pp/cp/pp 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.