G7 Finance Leaders Urge Global Economy Stabilization

Group of Seven finance ministers and central bankers agreed to continue working together for the stabilization and advancement of the global economy, at a meeting held in Tokyo on Saturday.

The finance leaders from the United States, Japan, Germany, France, Italy, and Canada released a communiqué after a long discussion on solutions to financial instability triggered by the U.S. subprime mortgage crisis.

According to Japanese media reports, the participants stressed the necessity for appropriate measures, saying, “The economic fundamental remains solid but the U.S. property market slump, soaring oil and grain prices and concerns about inflation in some countries are increasing uncertainty.”

In the communiqué released last October, the G7 leaders had optimistically said, “The global economy has been on a solid growth over the past five years.”

American and European central banks provided liquidity by putting 170 billion dollars in their markets last August when the subprime crisis began to loom large. In last December, Europe supplied an additional 530 billion dollars to the market.

The finance leaders also pointed out that financial institutions that have witnessed losses due to the subprime crisis should fully disclose the accurate amount of losses and secure capital immediately.

They also urged oil-producing countries to increase oil production and expand oil refineries.

U.S. Treasury Secretary Henry Paulson explained President Bush`s $150 billion economic stimulus package to participating nations and asked for cooperation from each country at the meeting.

The Financial Stability Forum (FSF), a group of central banks, regulators and international bodies, released its interim report on the analysis of and solutions to the mortgage crisis.