G7 endorses plan to battle financial crisis

WASHINGTON — Finance officials from the world's top economic powers endorsed a plan Friday to stem the worst financial crisis in more than a half-century.

The officials from the Group of Seven countries issued the five-point plan aimed at reversing a credit crisis that has unhinged Wall Street and markets around the globe. They pledged to take "decisive action and use all available tools."

Under the plan, the countries vowed to protect major banks and to prevent their failure. They also committed to working to get credit flowing more freely again, support the efforts of banks to raise money from both public and private sources, bolster deposit insurance and revive the battered mortgage financing market.

"The current situation calls for urgent and exceptional action," the G7 finance ministers said in a joint statement.

To that end, Treasury Secretary Henry Paulson said the U.S. government will move ahead with a plan to buy stock in financial institutions. The Bush administration received authority to make direct purchases of stock in banks in the $700 billion financial rescue bill Congress passed last week.

Paulson and Federal Reserve Chairman Ben Bernanke met with their counterparts from the world's six other richest countries as the rout of financial markets sped ahead in the face of dramatic rescue efforts in the U.S. and abroad.

Besides the United States, the G7 countries are Japan, Germany, Britain, France, Italy and Canada.

"There was an overwhelming consensus that a coordinated approach is necessary," German's Finance Minister Peer Steinbrueck said after the meeting.

Aside from the important details on bank stock purchases that Paulson offered, the finance officials did not provide specifics beyond their five-point action plan. The one-page joint statement from the G7 financial officials was rare in its brevity. The statements usually issued by the G7 run multiple pages.

By adopting a broad set of common goals, individual countries will have leeway to develop specific remedies that best suit their needs, Paulson explained. The United States and other G7 countries have unveiled a number of bold plans already aimed at shoring up banks, protecting bank depositors and thawing frozen credit.

Whether Wall Street will be buoyed by the finance ministers' pledges is another matter.