Rocked by a financial crisis that is battering the world U.S. President George W. Bush and finance ministers from the Group of Seven rich countries opened talks on Saturday, as the leaders of France and Germany met to discuss a rescue package. Massive financial market selloffs in the past week "gets everybody's attention and brings the leaders of the world together with a clear mandate to take urgent and decisive action," David McCormick, U.S. Treasury official, told ABC's Good Morning America program.
McCormick declined to call the week's steepest fall on record a "crash," and said the U.S. government was taking action to deal with the crisis.
One day ahead of a Paris summit on the global credit crisis, French President Nicolas Sarkozy and German Chancellor Angela Merkel met as they moved towards a British-style plan of partial bank nationalization.
The heads of the European Union's four biggest economies -- Britain, France, Germany and Italy -- had held a first emergency summit one week earlier but Merkel and Sarkozy were split over the need for a common plan.
Now, after a week of plunging stock markets, and crisis talks on Friday between the finance ministers of the G7 industrial powers, the single-currency bloc has agreed to try once more to coordinate a response.
After the G7 talks in Washington, US Treasury Secretary Henry Paulson said his government was ready to invest directly in banks for the first time since the Great Depression in a bid to restore confidence.
This move followed the decision by Britain's Prime Minister Gordon Brown to guarantee inter-bank lending and to offer to take stakes in some of the country's biggest banks in a programme of partial nationalization.
Europe, after reluctance in particular from Merkel's Germany, now seems likely to follow London down this route, which bankers hope will restart frozen lending between banks and pump vital liquidity into financial institutions.
France's finance minister, Christine Lagarde, said French banks were relatively well positioned and would probably not need a government buy-in, but that other European economies might follow the British example.
"It's very likely, because European banks are also under-capitalized," she said in an interview with France Info radio on Saturday.
"We have seen Great Britain, which is outside the eurozone, make propositions in this area," she added. "We'll have to see about that in the eurozone, but I suppose it's one of the options."
On Friday, the German daily Die Welt reported that Germany was working on a British-style plan, and a senior European official told AFP that Brown's idea was a "good one" and would be discussed by the eurozone 15. "It would be smart to follow the British example at the European level," he said, speaking on condition of anonymity so as not to pre-empt the summit. "I spoke to Madame Merkel and I think she's open to a European decision."
Under the British programme, unveiled on Wednesday, 50 billion pounds (64 billion euros, 87 billion dollars) of taxpayers' money has been made available to buy shares in the country's banks.
Across the Atlantic, Paulson has a 700-billion-dollar pot with which to act since Congress approved his bail-out plan, initially focused on buying out bad loans or so-called "toxic assets" from banks in difficulty.
Under a five-point G7 "action plan" announced Friday, economic powers will ensure banks "can raise capital from public as well as private sources in sufficient amounts to re-establish confidence."