He said investors have lost confidence in the economic leadership of several key countries.
Speaking at the Asia society’s annual dinner in Sydney over the weekend, Mr Zoellick also said that the global economy was going through a multi-speed recovery.
He said developing countries are now the source of growth and opportunity.
In the past two weeks, Global Stock Markets suffered massive falls on fears about the state of leading economies.
Mr Zoellick said in US, markets were not afraid that the world’s biggest economy faced an imminent problem, but they had got used to the US playing a key role in the economic system and leadership.
He added that the Eurozone faced more serious problems.
Mr Zoellick said Australia was in a much better position than other developed countries because of structural reforms it had already undertaken.
On China, he said the appreciation of the Yuan would help reduce inflationary pressures in the country.