Fresh signs of budding inflation added urgency to a meeting of finance chiefs from rich nations today that aims to agree on how to keep a credit crisis from dragging the global economy into recession.
Ahead of an afternoon meeting of Group of Seven finance ministers and central bankers, British finance minister Alistair Darling urged unity in implementing proposals from a special study group that recommends tougher scrutiny of international banks' risk management activities.
"These are uncertain times," he warned. "I want to make the case for urgent action by the world's major economies to deal with what is the biggest economic shock since the Great Depression."
The persistent inflation pressures are complicating the task for central bankers, who need to balance efforts to keep growth on track with their desire to keep a lid on prices.
German Finance Minister Peer Steinbrueck said soaring food prices threaten to create a serious future political issue, and the topic was likely to get a lot of attention as finance officials around the globe gather for meetings of the International Monetary Fund and World Bank on the weekend.
The more immediate problem for the G7 is how to handle a hefty set of recommendations from the Financial Stability Forum - set up in the wake of the 1990s Asian financial crisis - for tightening bank scrutiny and settling a markets crisis that may cost up to $1 trillion in losses.
There were calls to urgently implement the proposals, which aim in part to ensure banks aren't caught short of cash in future times of stress, as happened in recent months as credit markets seized up.
The next step will be to push bankers to match the vigor of the efforts that global central banks have shown in battling the liquidity squeeze by urging these private-sector players to quickly put their losses behind them and resume lending.
Indications before today's meeting were that most G7 members already accept the proposals, including measures to improve risk management so banks aren't caught short of cash as occurred this year when credit markets seized up.
A select group of bankers has been invited to a dinner tonight at the US Treasury Department, following the formal G7 meeting and after a G7 communique has been issued at around 11.30pm (Irish time).
The G7 comprises the United States, Britain, Canada, France, Germany, Italy and Japan. US Treasury Secretary Henry Paulson clearly stated his position on Thursday that he wants banks to be ready to play their role as a market stabilizer.
"If you think you're going to need capital, don't be looking for the government to help you," Paulson said after addressing the Council of Institutional Investors. "If you think you need capital, go raise it."
On the eve of today's gathering, Bank of Japan Governor Masaaki Shirakawa said the G7 countries "need to show a clear determination towards stabilizing the financial system."
The eight-month-old crisis, which originated in a meltdown of US subprime mortgage markets, ricocheted through the global economy as securities cobbled together on Wall Street from bits and pieces of mortgage loans turned sour.
It has now has cast a pall over global economic prospects. The International Monetary Fund said this week it expected the United States to topple into a "mild recession" this year and estimated a 25 per cent chance the global economy will grow by 3 percent or less, which would be considered recessionary.