Darling calls for action from G7

UK Chancellor Alistair Darling has called on the Group of Seven (G7) rich countries to "do whatever it takes" to tackle the global financial crisis.

Speaking to the BBC before he and his fellow G7 finance ministers started their meeting in Washington, he said it was time for action not just words.

"The critical thing is that we don't just talk about these things but we actually get on with it," he said.

US President George W Bush said his country was doing all it could.

Mr Bush said the US was working "aggressively" to restore economic stability.

Restore confidence

The G7 meeting is now expected to last into the evening.

It precedes the IMF and World Bank meetings that take place over the weekend. All are being held in the US capital.

"In the past fifty years, there haven't been many - if any - meetings of the world's seven richest developed nations as important as today's"
Robert Peston, BBC business editor
Read Robert Peston's blog

Mr Darling said there was "a range of things that need to be done", starting with restoring confidence, and ensuring the banks can lend to each other again.

The UK's suggestion that other countries should follow its lead and provide loan guarantees to encourage banks to lend to each other may be considered.

"I'm trying to persuade other countries to do exactly the same as we have done so we can get the whole system moving again," Prime Minister Gordon Brown told the BBC news channel.

However, the BBC's North America business correspondent, Greg Wood, who is in Washington, said there were some signs that G7 ministers were finding it difficult to agree on a co-ordinated solutions.

G7 COUNTRIES

• United States
• Germany
• Japan
• France
• Britain
• Italy
• Canada

Analyst Mark Chandler of Brown Brothers Harriman said officials generally recognised "that current measures are not yet sufficient to turn the corner of the crisis".

"There is increasing speculation that the G7 meeting could take another major step and that is to guarantee all interbank lending," he added.

Chain reaction

Japan has said it will help pay if the International Monetary Fund (IMF) has to financially rescue any countries.

The country's Finance Minister Shoichi Nakagawa said the leaders needed to think beyond the G7 countries and consider how to help struggling smaller countries.

"The impact of the credit crisis is spreading to the world," he said.

"To minimise the chain-reaction, Japan is ready to take leadership in contributing to support countries by providing funds," he added.

It is reported that Japan will suggest using the currency reserves held by Asian and Middle Eastern countries to fund IMF bail-outs.

French Finance Minister Christine Lagarde agreed that all governments, not just G7 ones, must work together.

"The markets are not working well today, that is clear, and that is why we must all be working together," she said.