World Bank President David Malpass will leave his role a year before his term ends, giving way for a new leader to run the international financial institution.

In a Feb. 15 LinkedIn post, Malpass announced his plan to step down at the end of the fiscal year for the Washington, D.C.-based international bank, which is one of the world’s largest funding sources for developing countries. 

“Serving as President of the World Bank Group has been my enormous honor and privilege,” Malpass wrote on LinkedIn. “I am deeply grateful for the support of the Executive Directors, Officers, and staff across all five World Bank Group Institutions.”

Before becoming president of the World Bank, Malpass was a prominent figure in economic development and theory. He served as a chief international economist and chief economist at Bear Stearns & Co. from 1993 until the 2008 financial crisis. Afterward, he briefly worked at JPMorgan Chase & Co. before founding the financial services company Encima Global.

He held numerous governmental positions dating back to former U.S. President Ronald Reagan’s administration. Under former U.S. President Donald Trump’s administration, Malpass served as the head of international affairs at the U.S. Treasury from 2017 to 2019. Trump appointed him for a 5-year term at the World Bank in 2019.     

Malpass shared highlights from his tenure, such as “working hard together to reduce poverty, increase economic growth, reduce government debt burdens, and improve living standards.” He indicated at the end of his statement that he would continue to work in the public sector after leaving the bank.

Although Malpass gave no explicit reason for his sudden resignation, a controversy he was involved in may strongly indicate why he resigned.

Malpass came under fire in September 2022 during a climate panel where he did not confirm whether he believed fossil fuels are harming the planet, giving a vague response.

When asked for clarification on his view later, he stated he should have said “no” but was unprepared for the question and did not do his best job, according to Reuters.

Member organizations of the World Bank and current U.S. President Joe Biden’s administration condemned Malpass for not answering the question. Some members wanted him to resign over the situation.

His four-year tenure held various accolades, including $150 billion deployed in response to the COVID-19 pandemic, $170 billion in response to Russia’s invasion of Ukraine and a historic $93 billion financing package to help low-income countries and aid in doubling the climate financing.

People have long-awaited Malpass’s resignation as they believe his departure will leave the bank in a good state to refocus its resources toward the climate space.

“I’m glad David Malpass has heeded my calls to resign as World Bank President,” Sen. Edward Markey tweeted. “His support for fossil fuels and abject failure to fund climate action is unacceptable. Now, the World Bank must make up for his missteps and get ready to be part of the solution for a livable future.”

Biden announced on Feb. 23 that he will nominate Ajay Banga to become the next president of the World Bank.

Born and raised in India, Banga was a former executive at Mastercard Inc. He also served on the executive boards of organizations such as the nonprofit humanitarian organization American Red Cross and the chemical company Dow Inc. Biden said Banga has a unique perspective having witnessed the challenges that developing countries face.     

“He has spent more than three decades building and managing successful, global companies that create jobs and bring investment to developing economies, and guiding organizations through periods of fundamental change,” Biden said about the nominee in a statement. “He has a proven track record managing people and systems, and partnering with global leaders around the world to deliver results.”

The United States has a longstanding tradition of selecting the head of the World Bank, which means Banga has a high chance of becoming the next president.

“[Banga] has proven his ability as a manager of large institutions and understands investment and the mobilization of capital to power the green transitions,” John Kerry, a diplomat and climate envoy for the United States, said in a statement, according to CNN.