Sep 26, 2022 - Economy

Inter-American Development Bank president ousted after ethics probe

Photo of Mauricio Claver-Caron speaking from a podium at a summit

Mauricio Claver-Carone, then-president of the Inter-American Development Bank, speaks at a conference on economic growth in Latin America and the Caribbean last November in Madrid. Photo: Isabel Infantes/Europa Press via Getty Images

Mauricio Claver-Carone has been terminated as president of the Inter-American Development Bank (IADB), its board of governors announced Monday.

Driving the news: His departure will set off a formal process to find a replacement for the bank to help counter China's influence in Latin America.

  • The termination comes after a report revealed that he allegedly threatened to "burn" or "bring" the bank down over an investigation into claims that he had an affair with a staffer, which he denies.
  • IADB directors unanimously recommended that the board of governors fire Claver-Carone.

What we're watching: He told Reuters on Monday that he plans to pursue legal action.

Why it matters: Claver-Carone, who was nominated by former President Trump, was the first American to hold the position. His exit will set off a scramble among member countries on who should head the bank.

  • It also demonstrates that the Biden administration is willing to cut loose Americans installed by Trump, which could spell trouble for David Malpass at the World Bank.

The big picture: The IADB is a D.C.-based multilateral institution that works to fight poverty, bolster struggling economies and promote good governance.

  • The Biden administration has pressed the IADB to focus more on climate change and use loan facilities to counter China's Belt and Road initiative, which has caused financial distress in some emerging economies.

Of note: Monday's statement from the IADB board of governors did not include a reason for the decision to dismiss Claver-Carone, a former Trump National Security Council official.

What's next: Reina Irene Mejía Chacón, the executive vice president of the IADB, will act as president until an election is held to choose the new president.

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