Group of Seven finance chiefs meet here Friday to tackle a financial market crisis, a slumping global economy and rising inflation, under pressure to replace words with concrete action. Finance ministers and central bank governors of the G7 major industrialized countries will discuss an international plan to reinforce the global financial system aimed at preventing a recurrence of what has been called the worst financial crisis since the 1930s Great Depression. The G7 meeting comes as the US subprime home loan crisis batters the world's biggest economy, weakening world growth, and roils global financial markets. The gathering of finance officials from Britain, Canada, France, Germany, Italy, Japan and the United States is seen as setting the tone for this weekend's meetings in Washington of the board of governors of the International Monetary Fund and World Bank. With a sharp slowdown in the world economy and soaring food prices that are particularly hurting the poor and stoking social unrest, the world's top finance officials face the challenge of addressing complex challenges without aggravating them. Finding a way forward that takes into account the diverging circumstances of the G7 economies poses its own tough challenge but G7 officials have expressed optimism the job can be done. “I am confident that we will reach a consensus on concrete actions and a clear road map and timetable for reforms,” French Finance Minister Christine Lagarde wrote in an opinion article published Friday in the Financial Times. Calling the weekend meetings with the IMF “an important crossroads for the global economy,” Lagardere said it was the responsibility of the finance ministers “to cooperate to restore confidence and enhance the resilience of the financial system.” Global expansion is set to slow to 3.7 percent in 2008, half a point lower than its January estimate, and the US economy is likely in a “mild recession” and will stagnate through much of 2009, the IMF said Wednesday in its semiannual World Economic Outlook report. US Federal Reserve chairman Ben Bernanke said Thursday the current financial crisis requires swift action to improve US market regulation and backed a US task force plan. “We do not have the luxury of waiting for markets to stabilize before we think about the future,” Bernanke said in a speech. The US strategy echoes an international plan drafted by the Financial Stability Forum (FSF) that would require more transparency from the banks and reinforcement of capital reserves as part of improved risk management to avert future crises. The Financial Stability Forum includes representatives of 26 entities including central banks, the IMF and World Bank, and market regulators from the large economies. It is based at the Bank of International Settlements in Switzerland. IMF managing director Dominique Strauss-Kahn said Thursday the current global turmoil was the biggest financial crisis since the Great Depression of the 1930s. __
