How will that impact banks? There is thought to be a correlation between contributions to the IMF and the price of U.S. bank stocks. The theory is that investors expect IMF money to be used to repay debts to banks.
Strauss-Kahn was once a finance minister of France and played a critical role in the European Union's efforts to deal with the recent financial crisis. Now, he's now being denied bail and accused of a pattern of sexual misconduct spanning years.
With Strauss-Kahn announcing his resignation today, the IMF is left with a scandal and potential leadership vacuum at a time national governments are looking for places to cut spending. The IMF had named its second-in-command, John Lipsky, as acting president. But earlier this month, Lipsky had already announced his resignation effective in August.
In a statement, IMF said yesterday that the revised code of conduct in making for past two years was approved on May 6, but gave no explanation as to why it was made public, days after its Managing Director Dominique Strauss-Kahn was arrested in New York on rape charges.
"Under the Fund's new standards of staff conduct, approved on May 6 and which applies to both staff and management, a close personal relationship between a supervisor and subordinate presents a potential conflict of interest and must be reported and resolved, usually by reassignment of one of the individuals to a different work unit," said IMF spokesman William Murray.
Failure to report and then resolve the potential conflict of interest constitutes misconduct and is liable for disciplinary action, he said.
"Under some circumstances, such a relationship may also constitute harassment and would be investigated. If found to exist, harassment is grounds for disciplinary action up to and including dismissal," Murray said.
IMF policies on personal relationships are strong and consistent with best practice, including in the United States, he added.
The enhanced standards of conduct introduce new reporting requirements on close personal relationships in the workplace and update the institution's policies on harassment and discrimination.
They also reinforce protection against retaliation for staff who report suspected misconduct, while clarifying procedures for conducting and overseeing investigations of such misconduct.
The main enhancements to the standards of conduct include a new policy on close personal relationships in the workplace, which requires that a supervisor who has an intimate personal relationship with a subordinate inform the management about the same.
It also includes a new policy concerning protection against retaliation, greater emphasis on prevention and early resolution in policies on harassment and discrimination.
"The IMF's ethics framework is consistent with best practice and compares well with that of other organisations," said Virginia Canter, a former Associate Counsel to the US President who has served as Ethics Advisor since early 2010.
"The staff has a variety of channels to report misconduct, and each incident of misconduct is investigated and dealt with independently, rigorously, and fairly.
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