G-7 Vows To Restore Confidence in Bank System, World Economy
Group of Seven finance chiefs pledged to restore confidence to financial markets and growth to the world economy, stopping short of spelling out what new policies they would implement to meet those goals, Bloomberg reported.
G-7 officials meeting in Rome this weekend said in a draft statement that the downturn will "persist" through 2009 and that stabilizing the world economy is their "highest priority." The full effect of individual stimulus measures will "build over time." The final communiqué will be released tomorrow.
"We reaffirm our commitment to act together using the full range of policy tools to support growth and employment and strengthen the financial sector," the draft statement said.
G-7 officials gathered as reports today showed Germany's economy contracted the most in 22 years in the fourth quarter and U.S. consumer confidence neared its lowest since 1981. With the worst global slump since World War II battering state finances, International Monetary Fund Managing Director Dominique Strauss- Kahn said in Rome he expects more nations to need assistance.
That's putting governments and central banks under greater pressure to reverse the malaise and U.S. Treasury Secretary Timothy Geithner today demanded "exceptional measures" from his counterparts.
"More is better," said Jim O'Neill, chief economist at Goldman Sachs Group Inc. "People have had their confidence shattered."
The G-7 officials met for dinner tonight in the 16th century Villa Madama on the outskirts of Rome. They will continue talks tomorrow before releasing a final statement at about 2:30 p.m. local time and briefing reporters.