The Group of 7 discuss the US housing market crisis in Tokyo

The Group of Seven, known as G7 met this weekend in Tokyo to discuss world economy. The finance leaders said the global economy could get worse since the crumbling of U.S housing market. But also shared that fundamentals remain solid and the U.S. is likely to escape a recession. Finance ministers and central bankers from Japan, the United States, Canada, Britain, Germany, Italy and France say that growth in their countries is expected to slow down in the short term. It comes after the severe price fall in the U.S property market and the tightening of credit conditions, that is slowing down U.S. consumers' cash flow. Banks have restrained loans as their losses rise above $100 billion US Dollar. Businesses affected by the loss of cash flow are reducing costs and cutting jobs, slowing down consumption further. U.S. Treasury Secretary Henry Paulson says the G7 discussion was focused on how to minimise this period of turmoil. [Henry Paulson, U.S. Treasury Secretary]: "First focus, getting through this period of turmoil while minimizing the impact on the real economy." Japanese Finance Minister Fukushiro Nukaga says the fundamentals of the global economy remained firm. [Fukushiro Nukaga, Japanese Finance Minister]: (male, japanese) "The world economy faces an increasingly uncertain environment but its fundamentals as a whole remains solid." European Central Bank President Jean-Claude Trichet also says the economic fundamentals in Europe were not affected. [Jean-Claude Trichet, European Central Bank President]: "We consider that the economic fundamentals are sound in Europe, we are not imbalanced either domestically or the external side." G7 leaders urged banks to fully disclose their losses and sustain their balance sheets so as to help restore the normal functioning of markets.

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YouTube | February 12, 2008

Tags:. .slowing. .price. .met. .global. .germany