WASHINGTON - The World Bank agreed Sunday to help developing countries strengthen their economies, bolster their financial systems and protect the poor against the financial turmoil in international markets.
Robert Zoellick, the bank's president, said the contagion affecting the global economy "has been a manmade catastrophe and responses to overcome it lie in all our hands."
He spoke as the U.S. moved to shore up Wall Street and financial institutions and the 15 countries that use the euro agreed in Paris to temporarily guarantee bank refinancing to ease the credit squeeze.
Speaking at a joint news conference with Zoellick, Dominique Strauss-Kahn, the head of the International Monetary Fund, endorsed the European move and said he expected markets to react favourably, "although you never can be sure what will happen."
Strauss-Kahn also called for quick implementation of the $700 billion U.S. rescue plan, which includes the government buying part-ownership in an array of banks.
Zoellick said that as the current crisis has unfolded, people in the United States and Europe reacted first with confusion, then anger, then fear.
"Those natural reactions will spread around the world as the impact spreads," Zoellick said. "We need to take them seriously."
He said any prolonged tightening of credit or a sustained global slowdown could cause serious setbacks to developing countries' efforts to improve the lives of their populations. Such countries are already struggling with high prices for energy and food.
"The poorest and must vulnerable groups risk the most serious -- and in some cases, permanent -- damage," Zoellick said. "One hundred million people have already been driven into poverty this year and that number will grow."
Zoellick said the financial crisis underscored the need for "concerted global action now, not just to deal with the crisis but to put in place new architecture, new norms and new oversight to ensure that this crisis never happens again."
He said the bank and the IMF must ensure that as governments turn their attention to domestic matters, they do not step back from their commitment to provide billions in aid to poor countries.
"Aid flows must be maintained," Zoellick said. "Today's meeting of ministers was unanimous in that regard."
