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G7 nations pledge to fight crisis | G7 nations pledge to fight crisis |
(30 minutes later) | |
Finance ministers from leading industrialised nations have pledged action to tackle the financial crisis after a torrid week on stock markets. | Finance ministers from leading industrialised nations have pledged action to tackle the financial crisis after a torrid week on stock markets. |
The G7 nations said they would take "decisive action and use all available tools", after a meeting in Washington. | The G7 nations said they would take "decisive action and use all available tools", after a meeting in Washington. |
Widespread fears of a global recession caused Asian, European and US markets to tumble on Friday despite rate cuts and cash injections by central banks. | Widespread fears of a global recession caused Asian, European and US markets to tumble on Friday despite rate cuts and cash injections by central banks. |
George W Bush said his government would continue to act to resolve the crisis. | George W Bush said his government would continue to act to resolve the crisis. |
As well as the Washington meeting of the G7 - which comprises the US, Japan, Britain, Germany, France, Italy and Canada - the International Monetary Fund (IMF) will hold talks in the US capital over the weekend. | As well as the Washington meeting of the G7 - which comprises the US, Japan, Britain, Germany, France, Italy and Canada - the International Monetary Fund (IMF) will hold talks in the US capital over the weekend. |
Leaders of the eurozone countries are also scheduled to meet in Paris on Sunday. | Leaders of the eurozone countries are also scheduled to meet in Paris on Sunday. |
'Protect savers' | |
After Friday's meeting, G7 ministers issued a five-point plan aimed at unfreezing the flow of credit that has prompted panic selling on global markets. | |
Paulson said the US aimed to buy equity in struggling banks | |
US Treasury Secretary Henry Paulson said the plan aimed at providing liquidity to global markets and protecting savers. | |
The plan is intended to protect major banks and financial institutions from failure and ensure they can raise capital from public and private sources. | |
The plan also include steps to unfreeze credit and money markets, as well as protecting savers, although it did not reveal any specific measures. | |
Mr Paulson said separately the US government was also working on a scheme to buy stakes in struggling financial institutions. | |
"We are working to develop a standardized programme that is open to a broad array of financial institutions," he said. | |
Panic-stricken markets | Panic-stricken markets |
Speaking on the White House lawn earlier on Friday, US President Bush said the recent market turmoil was being driven by "uncertainty and fear". | |
But he said the US authorities had a comprehensive strategy and a wide range of tools that they were using "aggressively" to fix the problems. | But he said the US authorities had a comprehensive strategy and a wide range of tools that they were using "aggressively" to fix the problems. |
We're in this together and we'll come through this together President Bush Peston: Global fix neededFear grips global stock marketsCredit crisis: World in turmoil | We're in this together and we'll come through this together President Bush Peston: Global fix neededFear grips global stock marketsCredit crisis: World in turmoil |
Mr Bush defended last week's rescue package, saying it was big enough, but stressing it would take time to have its full impact. | |
The US president said America was working with other world governments to stabilise the panic-stricken markets. | The US president said America was working with other world governments to stabilise the panic-stricken markets. |
But volatile market conditions continued despite moves on Wednesday by six of the main central banks to cut interest rates by 0.5% and a separate move by China's central bank to cut rates by 0.27%. | But volatile market conditions continued despite moves on Wednesday by six of the main central banks to cut interest rates by 0.5% and a separate move by China's central bank to cut rates by 0.27%. |
Wall Street has lost a fifth of its value in the past 10 trading days, suffering one of its biggest weekly falls since the Dow Jones index was created 112 years ago. | Wall Street has lost a fifth of its value in the past 10 trading days, suffering one of its biggest weekly falls since the Dow Jones index was created 112 years ago. |
Markets in France, Germany and Britain plunged to end Friday between seven and nine percent lower. | Markets in France, Germany and Britain plunged to end Friday between seven and nine percent lower. |
Shares in Asia also closed down sharply, with Japan's main Nikkei index suffering its biggest one-day drop since the 1987 stock market crash. | Shares in Asia also closed down sharply, with Japan's main Nikkei index suffering its biggest one-day drop since the 1987 stock market crash. |
As panic mounted, there were trading suspensions in several countries including Russia, Austria, Iceland, Romania, Ukraine, Brazil and Indonesia. | As panic mounted, there were trading suspensions in several countries including Russia, Austria, Iceland, Romania, Ukraine, Brazil and Indonesia. |
Amid the gloom, the British pound tumbled to a five-year low against the US dollar and oil prices plummeted to a one-year low. | Amid the gloom, the British pound tumbled to a five-year low against the US dollar and oil prices plummeted to a one-year low. |