Analysts play down value of crisis meetings

Leaders of the Group of 20 major nations gather in London on April 2 for a summit to coordinate actions to try to rescue the world from financial crisis.

A series of meetings will be held to prepare for the summit which aims to deliver on commitments made at the G20 in Washington in November.

Four working groups are preparing reports ahead of the summit, each having two chairmen, one from an industrialised country and one from a developing country.

Finance ministers and central bank governors from Britain, Canada, France, Germany, Italy, Japan and the United States also met in Rome the past weekend.

But analysts are playing down the chances of the meeting coming up with specific steps to fight the deepening credit crunch with the G7 assuming a more ceremonial role, one can't expect it to agree on something concrete.

The euro weakened after Friday's grim news on GDP and the British pound rose while the yen also lost some ground as traders squared positions ahead of the G7 meeting.

G7 finance ministers are keen not to fuel further tension at the moment over competition via currency values, according to information gathered from pre-G7 briefings with officials.

Friday's currency moves, though, are in line with concerns that some officials have expressed ahead of the meeting, namely that excessive weakness in the pound is unwanted as far as mainland European countries are concerned and the fact that Tokyo would not like to see the yen raise endlessly.

The G7 industrial powers, all in recession or just about, are under pressure to prove they can work together to stop the rot rather than engaging in a "beggar-thy-neighbour" battle where each country fends for itself at others' expense.

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The Bank of England (BoE) will assume one of the key functions of credit markets for the first time on Friday, when it starts to finance big companies through the purchase of short-term commercial paper. The BoE's Commercial Paper Facility will be the first element of its broader Asset Purchase Facility to go live, in an attempt to breathe life into moribund credit markets which the central bank views as a major cause of Britain's economic slump. Finance minister Alistair Darling gave the Bank of England an initial £50 billion ($71 billion) last month to buy financial assets,

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Bank of Japan (BoJ) Governor Masaaki Shirakawa joined on Friday a growing call for G7 finance heads to take steps this weekend to rescue the worsening global economy. "The world economy is in a very severe situation at the moment, so I want (the G7) to frankly exchange views on economic conditions and the outlook and to discuss policy steps to help stabilise the world economy," Shirakawa told a media conference before leaving for the G7 meeting.

The Japanese economy is now undergoing severe adjustments in reaction to the severity of the world economy. The explanation of the background behind the extraordinary policy steps the BOJ has been taking including commercial paper purchases and stock buying.

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