The International Monetary Fund Thursday said it recently changed its ethics code to set new guidelines on workplace relationships between supervisors, as well as subordinates and sexual harassment.
"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," IMF spokesman William Murray said in a statement.
"Failure to report and then resolve the potential conflict of interest constitutes misconduct and is grounds for disciplinary action" and can also constitute harassment and would be investigated, Murray said.
"If found to exist, harassment is grounds for disciplinary action up to and including dismissal," he added. The standards previously didn't censure such relationships.
Earlier Thursday, IMF acting managing director John Lipsky, said the fund has "a very clear" ethics code.
"We have a very clear and highly elaborated process for dealing with any issues that might arise...the executive board has its own separate process, and I'm quite confident [the fund] seeks to follow absolutely best practice," he said.
"We do re-examine our codes from time to time and make sure they are absolutely where they should be...In this area I have complete confidence in the institution and its mechanisms," Lipsky said.
The release of the code comes just five days after now ex-managing director Dominique Strauss-Kahn was arrested in New York on allegations that he sexually assaulted and attempted to rape a hotel chambermaid. He has denied the charges.