He made the accusation in his annual peace message, 'Fighting Poverty to Build Peace', in which he also called for a 'common code of ethics' in a globalised world that would narrow the gap between the 'haves and the have nots'.

The Pope, who has recently issued several sharp criticisms of banking practices, said the negative aspects of the globalisation of finance were plain for all to see.

'Objectively, the most important function of finance is to sustain the possibility of long-term investment and hence of development,' he wrote in the message for the Catholic Church's World Day of Peace, celebrated on January 1.

'Today this appears extremely fragile: it is experiencing the negative repercussions of a system of financial dealings - both national and global - based upon very short-term thinking, which aims at increasing the value of financial operations and concentrates on the technical management of various forms of risk,' he said.

He added: 'The recent crisis demonstrates how financial activity can at times be completely turned in on itself, lacking any long-term consideration of the common good.'

A short-sighted mentality meant global finance had lowered its objectives to the point where its capacity to be a stimulus for long-term growth and jobs had been seriously weakened.

'Finance limited in this way to the short and very short-term becomes dangerous for everyone, even for those who benefit when the markets perform well,' he said.

Pope Benedict's message is traditionally sent to heads of state, government and international organisations.

He has already criticised the world's banking system since the current crisis began, but this was his most comprehensive critique yet of the global financial troubles.

In the 17-page message, the Pope also called for disarmament and a fight against world hunger and attacked some campaigns to reduce birth rates in order to help development, particularly those that promote abortion.

'There are international campaigns afoot to reduce birth rates, sometimes using methods that respect neither the dignity of the woman, nor the right of parents to choose responsibly how many children to have,' he said.

'Graver still, these methods often fail to respect even the right to life.

'The extermination of millions of unborn children, in the name of the fight against poverty, actually constitutes the destruction of the poorest of all human beings,' he said.

END