World Bank President Paul Wolfowitz has sworn to crack down on corruption by governments and officials in developing world nations where the bank operates.
Mr Wolfowitz says his anti-graft team must have a central role
He has also promised to examine any irregularities within the bank itself, vowing to tackle "difficult issues".
Speaking to employees worldwide, Mr Wolfowitz said the bank had to move "more decisively and energetically".
He said the bank was withholding loans worth $250m (£143m) to Kenya, which is embroiled in a high-level scandal.
In the 90-minute staff meeting, he also defended the recent appointments of some senior managers and advisers who have come in for criticism from the workforce.
He also said staff members should be praised when they raised concerns about corruption in projects.
"There has to be a lot of teething problems to go from a world where for 50 years the word corruption wasn't uttered in this institution to actually doing something about it. It doesn't happen by snapping your fingers," he said.
"I must say I think it was horribly overdue."
He said there were only a "handful" of cases of alleged corruption or fraud involving bank employees.
The major difficulties were in the nations that the bank lends to, he said. For that reason one loan had been approved to help Kenya tackle corruption.
"The fact that we're moving with one [loan] and holding up on five is a very strong message to the Kenyan government," he said.
The former deputy US defence secretary said the Washington-based bank's anti-corruption unit should have a core role and not be regarded as an "outside watchdog".
He also told the employee Staff Association that some recent high-profile appointments were all taken in line with procedures, including the post of anti-corruption chief taken by Suzanne Rich Folsom.
Mr Wolfowitz also said there was nothing unusual in bringing in advisers Kevin Kellems, a former adviser to US Vice President Dick Cheney, and Robin Cleveland, a former White House official.