Finance leaders from the world's top industrialised nations showed unity in response to a global economic slowdown, acknowledging that the situation could worsen due to the weakening US housing market. In a statement following meetings in Tokyo, the Group of Seven stated that economic growth prospects had deteriorated since their last gathering in October, although they maintained that the fundamentals were stable and the US economy was expected to avoid a recession. Italian Economy Minister Tommaso Padoa-Schioppa noted a greater sense of pessimism and concern compared to the previous meeting. Finance ministers and central bankers from Japan, the United States, Canada, Britain, Germany, Italy, and France acknowledged that economic growth in their countries was likely to slow to varying degrees in the near future. They highlighted significant risks stemming from the US housing market decline and subsequent credit tightening, which has impacted the flow of money to consumers and businesses that drive the global economy. Banks burdened with debt have reduced their lending due to increasing losses, mainly from failing U.S. home loans, exceeding $100 billion. This has led to concerns about a harmful cycle as consumer spending declines, causing businesses to cut back and lay off workers. Glenn Maguire, Chief Economist for Asia Pacific at Societe Generale in Hong Kong, pointed out that the G7 provided little information on how they plan to support the economy through coordinated action. He believes that the economic crisis, stemming from U.S. domestic issues, cannot be solved with a global action plan. U.S. Treasury Secretary Henry Paulson warned that global markets may experience a prolonged period of instability. In prepared remarks after the meeting, Paulson stated that the current financial crisis is severe and ongoing. He also mentioned that as the financial markets recover, there may still be volatility as risk is reassessed. The G7 leaders are calling for banks to reveal all losses and strengthen their balance sheets to help stabilize the markets. German finance minister Peer Steinbrueck suggested that writeoffs could amount to $400 billion. The leaders are committed to closely monitoring developments and taking necessary actions to ensure stability and growth in their economies. Promises to collaborate in restoring the financial system's health have been overshadowed by disagreements over fiscal and monetary policy ahead of the G7 meeting. Concerns were raised in Europe about the U.S. Federal Reserve's rapid interest rate cuts and fiscal stimulus package, which risked straining relations with allies. However, tensions eased after the European Central Bank signaled a potential rate cut, aligning with other central banks. French Economy Minister Christine Lagarde welcomed the ECB's shift but expressed a desire for further action, likening it to the beginning of a symphony. European leaders were particularly worried about the euro's strength, which reached a record high against the dollar following the Fed's rate cuts in September. However, the currency then decreased after the ECB's change in stance. Currency matters were not a priority at Saturday's meeting, with other economic issues taking precedence. The communique echoed the October statement, emphasizing the need for China to allow its yuan to appreciate more rapidly. Some G7 leaders believe China's undervalued yuan gives them an unfair advantage in trade and are urging Beijing to increase domestic investment to help stabilize the global economy. The statement further called on oil exporters to increase their production following a brief period where oil prices exceeded $100 per barrel last month. Prices have since decreased, but rose by 4 percent to $91.77 on Friday, marking the largest increase in almost two months. This spike was attributed to supply issues and a forthcoming cold spell in the United States.