22 September 2008

G7 Vows to Do What It Takes to Support the 'International Financial System'

The Economic Times
G7 vows to guard financial system
23 Sep, 2008, 0000 hrs IST, REUTERS

WASHINGTON: The Group of Seven finance ministers and central bank governors are maintaining ‘heightened close co-operation’ and pledged on Monday to take necessary actions to safeguard the international financial system. (And what is the international financial system exactly? - Jesse)

The G7 finance ministers and central bank governors said they held a conference call to discuss global financial markets and welcomed ‘extraordinary’ US actions to take illiquid assets off of bank balance sheets.

“We pledge to enhance international cooperation and to address the ongoing challenges in the global economy and world markets and maintain heightened close co-operation between finance ministries, central banks and regulators,” the G7 said.

“We are ready to take whatever actions may be necessary, individually and collectively, to ensure the stability of the international financial system.”

While the G7 welcomed the $700-billion US asset purchase plan, it stopped short of saying other countries would implement similar actions to mop up bad loans and securities choking the financial system.

Separately, German finance minister Peer Steinbrueck said that the G7 countries apart from the United States, Canada, Britain, France, Germany, Italy and Japan, do not plan any measures comparable to the US package to support the banking sector.

Meanwhile, Britain’s finance minister Alistair Darling said that the government would introduce a bill to reform the banking sector in two weeks' time.