G7 announces plan of action October 11, 2008 Group of Seven finance chiefs have announced a plan of action to fight a global crisis including the use of "all available tools" to support key institutions and prevent their failure.
"The G7 agrees today that the current situation calls for urgent and exceptional action," a statement released by the US Treasury said. "We commit to continue working together to stabilise financial markets and restore the flow of credit, to support global economic growth."
The plan states that the G7 would "take decisive action and use all available tools to support systematically important financial institutions and prevent their failure." It adds that the G7 members will "take all necessary steps to unfreeze credit and money markets and ensure that banks and ensure that banks and other financial institutions have broad access to liquidity and funding."
Pressure on G7 as markets dive World stock markets plunge amid a massive sell-off and fears of a global recession as the Group of Seven ministers hold crisis talks.
The statement said members would "ensure that our banks and other major financial intermediaries, as needed, can raise capital from public as well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses."
It also said the G7 would ensure that national deposit insurance and guarantee programs "are robust" to allow people to have confidence in the safety of their deposits.
The plan also calls for "action, where appropriate, to restart the secondary markets for mortgages and other securitised assets."
The G7 statement came as the global finance chiefs gathered in Washington for crisis talks in search of a solution to a growing financial firestorm as panic spread in global markets.
The meeting brought together ministers and central bankers of the United States, Germany, Japan, France, Britain, Italy and Canada.
The meeting of the finance ministers and central bankers of the Group of Seven was being held amid a stunning loss of confidence in the global financial system that has sent markets into a freefall.
The major industrial powers have already pumped massive amounts of liquidity into the global banking system in an effort to unclog credit markets, and led a coordinated cut in interest rates.
But panic has still gripped the markets, which have hit multiyear lows in the United States and most other countries amid loss of confidence.
Stock exchanges from Tokyo to London suffered more staggering losses today, adding to the turmoil for finance ministers from the G7 to discuss.
