G7 nations vow to stop financial crisis

The world’s seven largest economies finance ministers and central bank governors met in Washington and have agreed to do whatever they can in order to tackle the financial crisis which has spread and threatens to take the entire world into recession.
The G7 countries were in agreement that the current financial meltdown all over the world called for ‘urgent and exceptional action’ and that governments would “take all necessary steps to unfreeze credit and money markets”.
It isn’t just the G7 countries that met, even the International Monetary Fund and the World Bank also met on the weekend to be able to find a solution to this crisis. The financial crisis that first engulfed America has now spread to parts of Europe as well as Asia.
The sub prime market crisis which hit America has now caused losses worth almost $200 billion to the top banks of the world. The effects of this crisis are now being felt all over the European markets. The stock markets of the world are on the downslide including the Indian stock markets. The G20 countries that comprise of the twenty most developed countries in the world also met on Saturday to be able to come up with a solution for the crisis.
What started as the subprime mortgage crisis in America with Lehmann Brothers, one of the largest investment banks of America went bankrupt and Merrill Lynch was sold to Bank of America. Morgan Stanley and Goldman Sacchs became retail commercial banks and dropped investments. All the countries in the world are expected to face less growth this year as all the economies of the world are going to be hit hard by the financial crisis, and some countries may slip into recession.
The G7 meeting occurred at a time when there is gloom all across the world and there was a feel in the market that the G7 block would not be able to find a way to stem the crisis which now seems to have spread beyond America and Europe. The government in America passed a $700 billion package to save the economy of the country. Britain also followed suit, it is expected that Germany will also be releasing a similar plan in the coming days on the lines of America and England. All the meeting ministers affirmed that they would supply public funds to banks which would be on the brinks of a collapse. But there was no common solution that emerged after the meeting. Thus the countries were not off the opinion that a single common solution taken by the G7 blocks could help reduce the financial turmoil. Defending their stand, the G7 block opined that people would be naïve to think that seven different countries facing a different set of problems having a different economy structure and political system would be able to come with the same policies in order to curb the financial crisis.
The international monetary fund too expressed its concern saying that the global growth for the current year could not be expected to cross three percent. Amidst the financial turmoil over the world, the Indian growth rate can also be expected to come down from figure of eight plus percent. The G7 countries have all shown a resolve to do whatever they can to stop the financial crisis. It waits to be seen whether their resolve and plan of action will be able to have a calming effect on the markets worldwide.

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