The International Monetary Fund expressed “full confidence” in its managing director on Tuesday in response to allegations that World Bank staff were pressured to change China’s business classification in an effort to placate Beijing.
The IMF’s 24-member executive board said in a statement that its review “did not conclusively demonstrate that Managing Director Kristalina Georgieva played an inappropriate role” in the situation in her previous role as a senior World Bank official.
“Having reviewed all the evidence presented, the executive board reaffirms its full confidence in the leadership and ability of the managing director to continue to perform her duties effectively,” she said.
However, he said the investigation into possible misconduct by World Bank staff was continuing and that the United States, the IMF’s largest shareholder, said it planned to closely monitor further investigation on the matter.
Georgieva has denied wrongdoing in response to a report alleging she played a role in pressuring staff to amend data affecting business climate rankings for China and other nations.
US Treasury Secretary Janet Yellen spoke to Georgieva by phone and said the report “raised legitimate issues and concerns,” the Treasury Department said in a statement.
However, the Treasury agreed that “in the absence of more direct evidence regarding the role of the managing director, there is no basis for a change in IMF leadership.”
Yellen said it was crucial to defend the integrity of the IMF and the World Bank.
The United States believes that proactive steps must be taken to strengthen the integrity and credibility of data at the IMF, and that the institution and its leadership must renew their commitment to maintaining transparency and whistleblower protection around policies, research and analysis to provide public accountability and oversight over key decisions, ”the Treasury statement said.
The IMF had said late on Friday that it was seeking more “clarifying details” in its investigation and the board met again with Georgieva on Sunday.
Georgieva appeared before a panel for more than five hours last week after a presentation by the WilmerHale law firm alleging that she and other World Bank officials had pressured staff to amend the data.
The law firm’s report prompted the World Bank to discontinue the annual Doing Business report, which China and other countries had used to attract foreign business investment.
The incident led critics to claim that China, the world’s second-largest economy, has too much influence over international financial organizations.
Annual meetings of the IMF and World Bank in 190 countries are taking place this week in Washington, and controversy over the Doing Business report threatened to overshadow the agenda for those meetings.
Georgieva is only the second woman to head the IMF, replacing Christine Lagarde two years ago, who left the IMF to become head of the European Central Bank.
George is Digismak’s reported cum editor with 13 years of experience in Journalism