Gordon Brown, Chancellor of the Exchequer, stressed that the world's seven richest countries had "turned talk into action" with their communique issued at the end of the meeting.
The Chancellor - who, along with the Governor of the Bank of England, appeared to signal yesterday that UK interest rates would come down this week - said: "The communique demonstrates that the G7 has agreed that all countries have a responsibility to act."
The communique set out the key commitments that each G7 member has made in sorting out the global financial crisis, as well as stressing the importance of strengthening the international financial system. However, experts are concerned that these steps not be sufficient to cheer world financial markets, which last week suffered a further bout of heavy losses.
The UK, US and Canada have agreed to "take appropriate action to maintain conditions for sustainable growth", interpreted as meaning that the UK will follow the lead of the US and Canada this week and cut interest rates.
The G7 also urged Congress to agreee to provide the International Monetary Fund with $15bn of additional funding.
The continental European economies have agreed to "preserve conditions conducive to robust domestic demand" as well as to implement "urgent structural reforms and reduce unemployment".
However, there are still concerns that the new European Central Bank will adopt an overly-rigid approach to monetary policy when it starts setting interest rates in January for the 11 European countries participating in the first wave of European Monetary Union.
Although the G7 noted the steps taken by the Japanese to date, the communique stressed the importance of taking "swift and effective action to strengthen the financial system, including the prompt enactment of measures to support viable banks with public assistance". The Chancellor said this was "the toughest-ever" G7 statement agreed to which Japan had agreed.
Mr Brown said there would be another G7 meeting, possibly before the end of the year, to discuss further the topic of reforming the IMF and the World Bank.
The UK proposal for a global financial regulator is "attracting growing support", according to Mr Brown.
The G7 agreed to implement proposals by the working groups of the G22 on transparency, strengthening financial systems and managing crises. Mervyn King, co-chair of the working group and deputy governor of the Bank of England, will unveil proposals of transparency and accountability later today.
The G7 communique reaffirmed that "the balance of risks on a global basis has shifted". Eddie George, Governor of the Bank of England, said he saw "no sign of an incipient credit crunch" in the UK, although this was an issue the Bank was monitoring.
He added that the UK and Europe had, to date, been largely immune from the widening credit spreads seen in the US.
THE LANGUAGE OF FINANCIAL DIPLOMACY
WHAT THE G7
"There was a lot of
energetic discussion" - Robert Rubin, US Treasury Secretary, presenting the communique.
"In the United States, Canada and the United Kingdom, the task of policy is to take appropriate action to maintain conditions for sustainable growth".
European countries are expected to achieve stronger growth this year as their recoveries strengthen. It is important to preserve conditions conducive to robust domestic demand".
"Japan's economic challenges have
intensified signficantly. We stress the importance that we attach to swift and effective action to strengthen the financial system."
"We agreed to explore a strengthened capacity to provide more effectively contingent finance to help countries maintain stability in the face of difficult global financial conditions".
WHAT THE G7 MEANT...
There was a blazing row - that blasted man
Duisenberg just doesn't get how it all works and
Tietmeyer wasn't much better.
We would never dream of second guessing the Bank of England but it had better cut interest rates this week.
The Germans and the French aren't going to cut rates, even though
everyone else told them they should. The last
people they are going to listen to are the
The Japanese have failed to sort out their banking system and have thus made the situation worse for everyone else.
We listened politely to President Clinton's plan for a new emergency fund but, we'll wait and see if he's still around before deciding anything.