G20 to take 'all necessary actions' to ensure stability

Burnt euro notes
Image caption Many observers fear that Europe's dream of a single regional currency are going up in smoke

The G20 countries have said they will take "all necessary actions to preserve the stability of banking systems and financial markets".

Their comments came as global markets were hit by one of the year's biggest sell-offs, and questions emerged over the state of the world economy.

At the heart of the worries are the continuing European debt problems.

Policymakers have been criticised for their fragmented reaction, with repeated calls for quicker actions.

Little help?

The statement by the G20, issued after a dinner in Washington, is aimed at countering these claims and reassuring markets.

"We commit to take all necessary actions to preserve the stability of banking systems and financial markets as required," the G20 said in its communique.

It added that they hoped to put in place "an action plan of coordinated policies" ahead of their next submit, which is due to take place in the French city of Cannes in November.

Some observers said that the announcement would do little to help market sentiment.

"There was some expectation in the market that they would signal concrete action or immediate coordinated steps," said Todd Elmer of Citigroup in Singapore.

"But the language of their statement sticks very much to what we've heard from them in the past, and does not suggest that there is anything new on the policy front in store."

Fellow analyst, Shane Oliver, head of investment strategy at AMP Capital in Sydney, agreed that the G20 need to detail specific policies.

"The bottom line is they need to follow up with action," he said.

"Until markets see coordinated action, they're not going to get a lot more confident."

The G20 group consists of the world's largest 19 national economies plus the European Union.