Vague pledges and a lack of action by G7 countries underscored differences between Europe and the US and a lack of room to manoeuvre.

Fears that any tentative green shoots in the global economy could be trampled by a deadly outbreak of swine flu put Asian markets on edge on Monday.

G7 finance ministers are under pressure to prove they can work together to stop the rot rather than engaging in a battle of "beggar-thy-neighbour".

The G7 meet in Rome this week to kick off a run of high-profile meetings among leaders wrestling to get recession-hit economies back on their feet.

Policymakers facing mounting job losses prepared new measures to ease the pain on Monday.

Growing fears of recession sent share and oil prices plummeting on Monday as markets shrugged off new moves to protect shell-shocked economies.

The US government plans to invest directly in US banks for the first time since the Great Depression, says Treasury Secretary Henry Paulson.

Global finance chiefs gathered in Washington for crisis talks on Friday as panic spread in global financial markets.

Top world finance ministers warned on Saturday that the global economy faces growing threats from a United States housing slump and credit crunch. The finance chiefs from the Group of Seven (G7) industrialised nations said their economies were set to lose steam in the near future but remained fundamentally solid.