World Bank Group to Implement Volcker Report

January 23, 2008

WASHINGTON, January 23, 2008 - The World Bank Group will implement the recommendations of the Volcker Report to strengthen its Department of Institutional Integrity (INT) which investigates fraud and corruption.  The recommendations include creation of an independent advisory board composed of international anticorruption experts to protect the independence and strengthen the accountability of INT.  They also call for creation of a preventive services consulting unit to help Bank staff guard against fraud and corruption in Bank projects.

The recommendations were made by an internal Bank Working Group that reviewed a report on INT by a panel led by former U.S. Federal Reserve Chairman Paul Volcker.  The Working Group broadly endorsed all recommendations of the Volcker Panel.  World Bank President Robert B. Zoellick said he appreciates the working group's plan for implementing the Volcker Panel recommendations to strengthen INT including raising the rank of the head of the department to Vice President.

"The work of INT is critical to the integrity of the World Bank Group and requires high level leadership," said Zoellick.  "That leadership will ensure these important initiatives are implemented so we can take stronger action against fraud and corruption and ensure money gets to the poorest people.  We must strengthen project integrity from the start, as well as investigate and act against wrongdoing."

Management presented the report of the Working Group to the Bank's Board of Executive Directors at an informal meeting on January 22.  While there will be additional discussions with the Board on the details of implementation of specific proposals, management has indicated its intention to carry out all the report's recommendations.  The initiatives will enhance transparency and prevention, clarify responsibilities and strengthen follow-up actions when fraud and corruption are discovered.  They will integrate the investigative work of INT more closely into Bank operations and provide for ongoing monitoring and evaluation.

"As the Volcker report said, the World Bank Group has played a major role in laying out the case that strong governance and anticorruption efforts are central to attacking poverty and sustaining growth.  It must take steps to continue to do so and it will," said Zoellick.

The Working Group, which was appointed by Zoellick, reviewed the Volcker Panel report, as well as comments solicited from the public and Bank staff with an aim to strengthen the Bank Group's ability to prevent and deter corruption to enhance implementation of its broader governance strategy and help borrower countries better fight corruption and fraud.

Working group members emphasized the critical role leadership plays in advancing the governance and anticorruption agenda.

Zoellick reinforced this message: "Individually and collectively, managers need to assist staff in identifying risks, coaching on how to counter them, strengthening the integrity of the Bank's work and steering a clear course through the tougher governance issues."

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