The top officials from Europe, North America and Japan agreed on joint action to stabilize markets and restore confidence. Saying that the current situation requires urgent action, they pledged cooperation on measures to unfreeze credit and get banks to lend to one another.
They promised to use all the tools at their disposal to prevent the failure of banks and institutions that could destabilize the global system. They will increase deposit insurance so that savers have confidence that their money is safe. And finally, they pledged action to make sure that money continues to be available for home purchases.
The seven participating countries are the United States, Japan, Britain, Germany, France, Italy and Canada.
The daylong meeting at the US Treasury was attended not only by finance ministers but also by the heads of central banks, including the European Central Bank, responsible for the 15 countries using the euro currency.
Henry Paulson, the US Treasury Secretary, chaired the meeting. "What stood out to me was that everybody said the same thing. Here are the issues we've got to deal with. Let's learn from each other and let's stay in communication. Let's go about developing these measures as soon as we can."
The Group of Seven meeting capped a week in which global stock markets suffered losses of 15 to 18 percent. It was the worst week for markets in 30 years with no region of the world immune from the financial panic associated with the freezing up of normal credit operations.
Paulson said he expects continued market volatility but he is confident that stability will be resturned. "Never have all of us been more dependent on the others and more connected. This is truly a global marketplace. It is truly a global economy. Growth in any area helps all of us, weakness anywhere hurts all of us."
Paulson conceded that credit markets are still clogged and that more action is required. "We've got more to do in the liquidity area. It is the pressing, short-term issue that we're facing."
On Saturday a broader group of finance officials, not only from these seven industrial democracies but also from Russia, China, India and other developing countries meet to discuss the global financial crisis. There will also be a meeting with President Bush.