Sept. 30 – The president of the World Bank cautioned U.S. authorities on Monday against assuming the dollar would maintain its role as the world’s reserve currency. Robert Zoellick said other currencies such as the euro and the Chinese yuan could win increasing acceptance in international currency markets.

Speaking at Johns Hopkins University’s School for Advanced International studies in advance of the World Bank’s annual meeting next week in Istanbul, Zoellick said that China, Russia and India have indicated they want to see long-term changes in the international monetary system in the wake of the financial crisis that has pushed the world economy into its first synchronized downturn since World War II.

Authorities in Beijing were moving toward gradual internationalization of the yuan by making it easier for its trading partners to do business in currency swaps he said. “`We are likely to see this shift in the world of investment as well,” he said. “For the first time this month China issued sovereign bonds to offshore investors” in yuan. China recently announced that foreign companies will be able to list on the Shanghai Stock Exchange, yet another step towards making the city an international financial center.”

In the wake of the global economic crisis, Zoellick said leaders of countries should reshape the multilateral system and forge a “responsible globalization” that would encourage balanced growth and financial stability.

“The old international order was struggling to keep up with change before the crisis,” he said. “Today’s upheaval has revealed stark gaps and compelling needs. It is time we caught up and moved ahead.”

Zoellick also said he opposed giving more authority to the U.S. Federal Reserve, believing that the Treasury Department is better suited to managing the American financial system because of the greater oversight of the department that Congress provides. “It will be difficult to vest the independent and powerful technocrats at the Federal Reserve with more authority,” he said.