G7 finance officials pledge action to stem financial crisis

Finance officials from the G7 countries have announced a series of measures to try to slow the effects of a financial crisis that is crippling markets around the globe.

Finance ministers, as well as bank heads from the Group of Seven countries — the most powerful economic nations in the Western world — pledged Friday to take "decisive action and use all available tools" to ease the crisis.

The group issued a five-point plan Friday evening after a meeting in Washington with U.S. Treasury Secretary Henry Paulson and U.S. Federal Reserve Chairman Ben Bernanke.

The measures include:
-Protection for major banks to prevent their failure.
-A commitment to help banks raise money from both public and private sources.
-A bolstering of deposit insurance.
-Help reviving the battered mortgage-financing market.

The Group of Seven countries are Canada, the United States, Japan, Germany, Britain, France and Italy. The finance officials are scheduled to meet with U.S. President George W. Bush Saturday at the White House.

Earlier in the day, Canadian Finance Minister Jim Flaherty announced his government's plan to buy the securities through the Canada Housing and Mortgage Corp. and provide much-needed cash to financial institutions that sell the so-called "National Housing Act mortgage-backed securities."

"This is going to make loans and mortgages more available and more affordable for ordinary Canadians and businesses," he said.

Flaherty, who attended the meeting in Washington, announced the new measures in an attempt to assuage concerns over the burgeoning global financial crisis and defuse criticism that the Conservative government was ignoring the spreading lending crisis.

He was expected to argue in Washington for tighter regulations of the kind that has kept Canada's banking system solvent in the middle of the global crisis.

Also Friday, Bush sought to assure the American public that governments worldwide were hard at work to counter the economic turmoil. He called for co-operation between the U.S. and other nations.

"We've seen that problems in the financial system are not isolated to the United States," he said in brief remarks from the White House Rose Garden.

"So we're working closely with partners around the world to ensure that our actions are co-ordinated and effective."

Members countries from the Group of 20 will meet with Paulson in Washington Saturday to discuss the crisis, which is also expected to dominate discussion at weekend meetings of the 185-nation International Monetary Fund and the World Bank in Washington.

CBC News Friday, October 10, 2008