World Bank President Robert Zoellick said today that he is stepping down, raising the possibility that a non-American might be chosen for the first time to head the 187-nation lending organisation.
Zoellick, 58, informed the board he will leave June 30 at the end of a five-year term, during which he led the bank's response to the global financial crisis.
The board now begins looking for a new president under guidelines directors adopted in 2011 calling for an "open, merit-based and transparent selection" process. That suggests a break from the informal agreement that dates to the bank's founding almost 68 years ago, under which the bank's president is an American and the head of its sister institution, the International Monetary Fund, is a European.
There is no guarantee that a non-American will be chosen to again head the bank even though China, which is now the world's second largest economy, and other countries with growing economic clout have been exerting pressure for a change in the US-European arrangement.
The IMF was supposed to follow the same open selection guidelines when it searched for a new managing director last year, but wound up again choosing a European, former French Finance Minister Christine Lagarde.
The World Bank is an international financial institution that provides loans to developing countries.
In a statement today, Treasury Secretary Timothy Geithner praised Zoellick's leadership at the World Bank and said President Barack Obama's administration would put forward a candidate for the World Bank board to consider as his replacement.
"We encourage the board to move forward with an open and expeditious process," Geithner said. "In the coming weeks, we plan to put forward a candidate with the experience and requisite qualities to take this institution forward."
Geithner's comments did not indicate whether the administration would be willing to back a non-American for the top job at the World Bank. But the US controls the largest share of votes on the World Bank board, giving it significant say in who leads the institution.
As Zoellick's term drew to a close, Secretary of State Hillary Rodham Clinton and former Treasury Secretary Lawrence Summers were mentioned as possible successors. But Clinton has said she is not interested. Summers was the chief economist at the World Bank before joining the Clinton administration.
Zoellick, a Republican appointed by former President George W. Bush, has a good relationship with Geithner and other members of the Obama administration. But analysts who follow the bank and some senior members of its staff said they were not surprised he decided to leave.
His plans after leaving were unclear. Zoellick could return to the private sector, where he was once a senior adviser at Wall Street's Goldman Sachs investment firm.
He could likely count on a high-ranking post if Republicans win the November elections, having served as deputy secretary of state and US trade representative in the Bush administration. But he did make enemies while in those positions.
Zoellick said he will stay focused on being bank president until June 30 and will continue to drive policies and programmes at a heightened pace. For example, later this month the bank said he will unveil a groundbreaking study on the future structure of China's economic growth model.
Under Zoellick's leadership, the bank provided more than $247 billion to help developing countries boost growth and overcome poverty.
Zoellick said he was "pleased that when the world needed the bank to step up, our shareholders responded with expanded resources and support for key reforms that made us quicker, more effective and more open."
He said the bank was now in a strong position and ready for new challenges "so it is a natural time for me to move on and support new leadership."