The Group of Seven nations welcomed the $700 billion US markets bailout plan today and said they were prepared to step up international cooperation to protect the world's financial and banking system.
But a day after US Treasury Secretary Henry Paulson said he was "aggressively" encouraging other countries to put in place bailout packages of their own, there was little sign other G7 governments were prepared to follow Washington's lead.
"We pledge to enhance international cooperation to address the ongoing challenges in the global economy and world markets and maintain heightened close cooperation between finance ministries, central banks and regulators," the G7 ministers said in a statement following a conference call on Monday.
"We are ready to take whatever actions may be necessary, individually and collectively, to ensure the stability of the international financial system," they said.
The statement, a few weeks before G7 finance ministers and central bank governors meet in Washington on October 10th, follows a tumultuous week that started with the demise of Lehman Brothers and ended with one of the biggest financial rescues in history.
It said ministers welcomed the "extraordinary actions" taken by Washington to remove illiquid assets that have contaminated banks' balance sheets and fuelled a financial crisis widely seen as the worst since the 1930s.
The world's big central banks have already joined in a coordinated move with the US Federal Reserve to pump hundreds of billions of dollars in extra funding into markets to prevent the world financial system from seizing up in a credit freeze.
But there was little appetite to mimic Mr Paulson's scheme to buy up toxic mortgage-related debt from financial firms.
"At the moment, I don't think Japan needs to launch a programme similar to that of the United States," Japanese Vice finance minister Kazuyuki Sugimoto told reporters in Tokyo, echoing similar comments from France, Britain and Germany.
US president George Bush said negotiators were making "good headway" on legislation to provide an unprecedented $700 billion bailout of financial markets and that he was confident a measure to prevent lasting damage to the economy could be enacted.
"Failure to act would have broad consequences far beyond Wall Street. It would threaten small business owners and homeowners on Main Street," Mr Bush said in a statement.
Administration and congressional negotiators worked through the weekend to craft legislation that would provide the largest bank rescue plan and give sweeping powers to the US Treasury to buy mortgage-related debt from financial firms.
Mr Bush warned against adding unrelated provisions onto the measure and said the world was watching to see whether the United States can act quickly to shore up markets.
Reuters