WASHINGTON, Oct 26: International Monetary Fund head Dominique Strauss-Kahn kept his job on Saturday after an investigation into his affair with an IMF economist, but was scolded by fund directors for “a serious error of judgment.”

Based on an independent external inquiry, the IMF executive board said it had “concluded that there was no harassment, favoritism, or any other abuse of authority by the managing director.

“Nevertheless, the executive board noted that the incident was regrettable and reflected a serious error of judgment,” it said in a statement.

In a teleconference with the press, IMF executive director Shakour Shaalan said that the board had unanimously accepted Strauss-Kahn’s apologies and that it would continue to work with him.

“The mood of the board was very, very positive,” he said after it met on Saturday on the case. “Our conclusion was that this in no way affects the effectiveness of the managing director.”

“The managing director is very competent in carrying out his job. This was an unfortunate incident; the board has accepted his apologies.”

Shaalan acknowledged that many in the IMF staff, especially women, “are not at all happy” with Strauss-Kahn’s behaviour.

“The managing director has expressed his regrets, I don’t think that we can ask him to do more at this time,” he said.

“We will continue to work with him. If there is some confidence that has been lost, he will regain it very soon.”

Strauss-Kahn, 59, considered one of the pre-eminent European political figures on economic matters, was appointed in September 2007 to head the IMF and help reform the institution.

The French former political star earlier admitted he had an extramarital affair with Hungarian-born economist Piroska Nagy, but denied that he had harassed her and rejected suggestions she was given a more generous severance package than merited when she left the IMF in August.

In a statement on Saturday, Strauss-Kahn said he had apologised to the board, IMF staff and his family for his behaviour.

“I very much regret the incident and I accept responsibility for it,” he said.—AFP