Finance leaders from the top industrialized nations of the world expressed solidarity in the face of an economic slowdown, acknowledging that the situation could worsen due to the deteriorating US housing market. Following meetings in Tokyo, the Group of Seven released a statement stating that economic growth prospects had declined since their last meeting in October, although they believed the fundamentals were still strong and the US economy would likely avoid a recession. Italian Economy Minister Tommaso Padoa-Schioppa noted a sense of increased pessimism and concern compared to October. The finance ministers and central bankers from Japan, the United States, Canada, Britain, Germany, Italy, and France expected varying degrees of slowing growth in their countries in the short term. They highlighted the significant risks posed by the US property market decline and resulting credit tightening, which has slowed the flow of money to consumers and businesses that drive the global economy. Debt-laden banks have reduced lending due to increasing losses from souring U.S. home loans, surpassing $100 billion. This could lead to a downward spiral as consumer spending slows, causing businesses to cut jobs. Glenn Maguire, Chief Economist for Asia Pacific at Societe Generale in Hong Kong, pointed out that the G7 did not provide much detail on coordinated efforts to support the economy. He stated that the economic shock and downturn are mainly due to domestic issues in the U.S. and cannot be solved by a globally coordinated plan. U.S. Treasury Secretary Henry Paulson warned that global markets may experience an extended period of instability. In prepared remarks after the meeting, Paulson stated that the current financial crisis is severe and ongoing. He mentioned that as the financial markets recover from this stressful period, volatility should be expected as risk is reassessed. The G7 leaders called on banks to be transparent about their losses and strengthen their balance sheets to help return markets to normal operation. German finance minister Peer Steinbrueck warned that writeoffs could reach $400 billion. The leaders stated in a communique that they will closely monitor developments and take necessary actions to ensure stability and growth in their economies. Promises to collaborate in order to fix the financial system were overshadowed by disagreements on fiscal and monetary policy before the G7 meeting. Concerns were raised in Europe about the U.S. Federal Reserve's rapid interest rate cuts, which were accompanied by a large fiscal stimulus package. This caused tension between the U.S. and its allies on how to combat the credit crisis. However, tensions eased when the European Central Bank indicated it may soon follow suit in cutting rates. French Economy Minister Christine Lagarde welcomed this move but expressed a desire for more action. European leaders expressed particular concern about the euro's strength, which reached a record high against the dollar following the Federal Reserve's decision to cut rates in September. However, the currency weakened after the European Central Bank reversed its stance. Foreign exchange matters took a back seat at Saturday's meeting, with a focus on more pressing economic issues. The communique reiterated the call for China to allow its yuan to appreciate faster, as many G7 leaders believe the undervalued yuan gives China an unfair trade advantage and have urged Beijing to increase domestic investment to help rebalance the global economy. The statement encouraged oil exporters to increase production following a brief period where oil prices exceeded $100 per barrel last month. Despite a subsequent decrease, prices rose by 4 percent to $91.77 on Friday, marking the largest increase in nearly two months, due to supply issues and an upcoming cold spell in the United States.