By Jack Duffy

WASHINGTON (MNI) – Finance ministers and central bankers from the
Group of 20 countries said Thursday night that they would provide their
banks with as much liquidity as necessary to confront the current
financial crisis.

In a surprise communique issued after a first day of talks here
at the annual meetings of the International Monetary Fund and the World
Bank, the G20 said it would take “all necessary actions to preserve the
stability of banking systems and financial markets.”

The communique added that, “We will ensure that banks are
adequately capitalized and have sufficient access to funding to deal
with current risks.”

At a late-evening press conference, French Finance Minister
Francois Baroin said the decision to issue a communique reflected the
seriousness of the current market turbulence.

Amid fears that a deteriorating European debt crisis will tip the
world economy into a new recession, financial markets plunged worldwide
on Thursday, with the Dow Jones industrial average dropping 391 points.

“We are gong to manage this situation with courage, with method and
according to a calendar,” Baroin said of the debt crisis.

Lacking specifics, however, the G20 statement appeared to
disappoint markets in Asia, with Japan’s Nikkei 225 stock
average initially falling more than 2% early on Friday.

The communique said the G20 economices were “committed to a strong
and coordinated international response to address the renewed challenges
facing the global economy, notably heightened downside risks from
sovereign stresses, financial system fragility, market turbulence, weak
economic growth and unacceptably high unemployment.”

In the Eurozone, the communique said the 17-nation bloc “will have
implemented by the time of our next meeting the necessary actions to
increase the flexibility of the EFSF and to maximize its impact in order
to address contagion.”

Baroin and Bank of France Governor Christian Noyer said at the
press conference that it was of crucial importance that European
countries quickly implemented the decisions taken and the July 21 summit
in Brussels.

“This will be the correct answer to reassure markets,” Noyer said.

** Market News International Washington Bureau: 202-371-2121 **

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