Rotterdam- ­ Former world leaders meeting in the Dutch city of Rotterdam this week have urged the leaders of the G20 who will meet in Washington next week, to reform the world's existing financial system.

A statement released on Thursday by the General Assembly of the Club of Madrid said in-depth reform of the global financial architecture" is needed.

The Club of Madrid is an international organization made up of 72 former heads of state and government from more than 51 countries. Among other things, the organization aims to strengthen global democracy, fight poverty and enhance intercultural relations.

The organization was on Thursday holding its so-called Global Forum, having held its Global Assembly earlier in the week.

It is clear that the institutions entrusted with the regulation of the global economy have proven fragile and incapable of forecasting the crisis," the Club of Madrid's statement said.

The institutions have been unable to adopt the necessary measures to prevent financial speculation from contaminating all forms of financing, thus creating a significant disequilibrium between financial markets and the real economy," it added.

The former heads of state emphasize that more equitable terms of trade must be promoted."

Also, leaders must avoid a return to protectionism that would intensify the difficulties of emerging and the marginalization of least developed economies."

Mary Robinson, former Irish prime minister and former UN High Commissioner for Human Rights, has been on of the major forces behind the Club of Madrid.

In an interview with Deutsche Presse-Agentur dpa in Rotterdam, Robinson said the current momentum of the crisis should be used to reform the financial sector dramatically.

"I have just returned from a meeting of Dubai where some 700 people convened, many of whom financial experts, to discuss the situation," she said, referring to the recent World Economic Forum.

"They expect the current crisis to have a far more serious impact and continue for a longer period of time than I had previously thought. There is no doubt that the poor in the world will be affected much more by this crisis than anyone else."

Robinson noted that the developing world was already struggling with the effects of rising food prices and climate change before the credit crisis took place.

Asked whether she supports the viewpoint of Dutch legislator Geert Wilders of the rightist Freedom Party that import barriers of the European Union be removed to enhance free trade for developing countries, Robinson said she was in favour of such ideas but added development aid should continue simultaneously."

Club of Madrid president Ricardo Lagos, Chile's former head of state, on Thursday said an effective regulatory framework for global markets" was needed, which "can only be achieved through a strengthened role of both states and the multilateral financial institutions."

"The flexibility of markets and their capacity to innovate is to be preserved while safeguarding people and societies from the perverse effects of the irrational exuberance that cyclically affects them," he said.

The Global Forum, attended by former world leaders from all continents, including former US president Bill Clinton and New Zealand's former prime minister Jenny Shipley, continues through Friday evening. (dpa)