World Bank President Robert Zoellick said on Tuesday that financial markets are showing signs of stabilization, but warned that the global crisis was far from over in developing countries.

Speaking to reporters ahead of a meeting of finance ministers from Latin America, Zoellick said developing countries were only now feeling the full force of the global economic and financial crisis, which could quickly return to advanced economies where it began.

He said demand for World Bank financing was high and growing as credit markets remained shut to many developing market clients.

There seems some opportunities for improvement on the financial market side, but there is still great uncertainty about the scope and timing of recovery, Zoellick told reporters on a conference call

There are risks that could threaten the turnaround and I have emphasized the world needs to recognize that dangers will come in waves, he said. Zoellick was speaking ahead of a meeting of finance ministers from Latin America in Chile on July 2.

A number of developing countries remain under significant stress, he added.

Zoellick said the strength of the recovery and the potential for setbacks depends a lot on how policy-makers cope with risks, including in banking systems, protectionism and financing of rollover debt of private-sector companies.

The World Bank estimated in March that well over $1 trillion in emerging market corporate debt and $2-3 trillion in total emerging market debt will mature in 2009, the majority of which reflects claims of major global banks extended across borders or through affiliates in emerging markets.

Zoellick said developing countries faced a total financing shortfall in the range of $350 billion to $635 billion, of which $178 is in Latin America.

He said demand for financing from the World Bank was increasing in part because developed countries have guaranteed so much debt that it is crowding out good developing country debt.

Even if they can go to the markets and go sometimes to their domestic markets, it will crowd out their private sector, Zoellick said, So, I remain quite cautious about the overall state of the recovery. I don't think we're remotely through this.

We remain in a situation where we have to be very alert to dangers because there are significant risks out there, and we are finding that the demand for our resources from all of our different instruments ... remains high and growing, he added.

Zoellick said he would discuss with Latin American finance ministers ways to bolster the World Bank's capital base. This could include possible early replenishment of money for the Bank's facility that provides low-cost loans and grants to 78 of the world's poorest countries, 39 of which are in Africa.

(Reporting by Lesley Wroughton; Editing by Dan Grebler)