The world's top financial officials, shaken by a credit crisis that has roiled markets around the world, planned to devote much of their discussions Friday to recommendations they hope will restore confidence.
The plan, with 65 recommendations, seeks to boost transparency, strengthen the role of credit rating agencies and bolster cooperation between regulatory authorities in major countries.
Those proposals will be explored when finance ministers and central bank presidents from the world's seven richest industrial countries meet in Washington for discussions to be led by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke.
The discussions, which will include the top finance officials of Japan, Germany, Britain, France, Italy and Canada, are taking place in advance of the weekend meetings of the 185-nation International Monetary Fund and its sister lending institution, the World Bank.
Even before the Group of Seven meeting, Paulson held a series of one-on-one sessions with finance officials from individual countries, including Japanese Finance Minister Fukushiro Nukaga. Nukaga told reporters that he believes each country should undertake suitable measures to deal with the global crisis.
The G-7 finance officials planned a dinner Friday night that will include executives of some of the world's biggest financial companies to get their ideas on what more should be done. Top executives of Citigroup, Deutsche Bank, Barclays, Credit Suisse, Lehman Bros. and Morgan Stanley were among those invited.
The financial officials are gathering after a credit crisis, which began in the United States with rising defaults on subprime mortgages, has spread around the globe. It has caused major financial institutions to declare billions of dollars in losses and brought Bear Stearns, the fifth largest investment bank in the United States, to the brink of bankruptcy.
The IMF said in reports this week that worldwide losses could approach $1 trillion over the next two years and that the turmoil has already pushed the United States, the world's largest economy, into a recession and raised the risks of a global downturn to one in four.
Faced with that gloomy assessment, global financial leaders are certain to do everything they can during the next three days of meetings to demonstrate that they are on top of the situation.
Paulson told an audience of bankers on Thursday that while "the risks continue to be to the downside" he believes the U.S. economy would receive a significant boost when 130 million households begin spending rebate checks the government will start mailing out next month. He said the extra consumer spending generated should be enough to create 500,000 to 600,000 extra jobs this year.
The plan the G-7 officials are working on was developed by the Financial Stability Forum, a group that includes central bankers and major financial regulators from around the world. The panel is headed by Mario Draghi, head of Italy's central bank, who will present his group's findings to the other G-7 officials during their Friday afternoon closed-door talks at the Treasury Department.
Those recommendations include proposals to make financial markets less secretive and improve supervision. One suggestion is to have banks, securities firms and other financial institutions disclose their holdings of securities backed by subprime mortgages, the risky debt instruments which were at the heart of the crisis in the United States.