WASHINGTON // The head of the International Monetary Fund will remain in his job after the agency's executive board concluded there is no cause for dismissal over an extramarital relationship. The IMF board issued a statement late yesterday saying that the actions of IMF's managing director Domique Strauss-Kahn were "regrettable and reflected a serious error of judgment". However, the 24-member board of directors decided Mr Strauss-Kahn's relationship with the former IMF employee was consensual and did not involve any type of sexual harassment, favoritism or any other abuse of authority by Mr Strauss-Kahn. The board, which represents all 185-member nations of the lending institution, reached its conclusions at the end of a daylong meeting at IMF headquarters in Washington. In a statement, the board said based on the findings of an outside law firm hired to investigate the matter and discussions yesterday with Mr Strauss-Kahn, they now consider the incident closed. Shakour Shaalan, the dean of the executive board, told reporters during a conference call the board believed the incident would not harm Mr Strauss-Kahn's effectiveness going forward. The IMF is expected to play a critical role in providing loans to countries harmed by the current global financial crisis. The former employee with whom Mr Strauss-Kahn had the affair has been identified as Piroska Nagy, now in London with the European Bank for Reconstruction and Development. The incident involving Mr Strauss-Kahn occurred 15 months after Paul Wolfowitz resigned as president of the World Bank amid controversy over a pay package for his girlfriend, a bank employee. The World Bank is a sister lending institution to the IMF.