MercoPress. South Atlantic News Agency

G7 ministers target financial sector and credit rating agencies

The G7 group of most industrialized nations, meeting in Washington, approved a plan Saturday aimed at easing the continuing crisis in the global credit markets.

Including calls for more oversight of financial firms and greater financial transparency, G7 members have committed themselves to its implementation

The plan also aims to improve the work of credit rating agencies. The announcement was made after a meeting of the seven nations, including the US, UK, Germany, France, Japan, Italy and Canada. "We remain positive about the long-term resilience of our economies, but near-term global economic prospects have weakened," said a statement issued by the G7 after the meeting. The plan further calls for the strengthening of authorities' responsiveness to financial risks, and puts in place arrangements to deal with stress in the financial system. It was drawn up for the G7 by the Financial Stability Forum (FSF) think-tank. The FSF is comprised of a number of central bank and treasury officials from around the world. "We have worked, and will continue to work, closely to address global challenges and take concrete actions," said US Treasury Secretary Henry Paulson. Before the G7 meeting, UK Chancellor Alistair Darling described the credit squeeze as the "biggest economic shock" the world has seen since the 1930s Great Depression. He said the G7 had to take "urgent action". The G7 finance ministers had gathered before World Bank and IMF meetings on Saturday and Sunday. The credit crisis stemmed from a slowdown in the US housing market and has had a knock-on effect worldwide and dented growth. Earlier this week the International Monetary Fund (IMF) forecast that the US would enter a "mild recession" in 2008 and said that the credit crunch could cost banks and other financial institutions around one trillion US dollars. The weakening US economy has been a major factor in pushing down the value of the dollar, which slipped to a 15-year low against the pound earlier in the week.