G7 Meeting Reveals Global Subprime Mortgage Fallout Worries

Tokyo–The Group of Seven finance leaders fear U.S. subprime-related write-offs could reach $400 billion, the Financial Times reports.After the group’s weekend meeting in Tokyo, German finance minister Peer Steinbrück said the G7 is concerned about the write-offs and was prepared to take action to restore financial calm to the global market. “The next 10 days to two weeks will be crucial because we are going to have the first audited accounts [from financial institutions] since the crisis started,” said Mario Draghi, governor of the Bank of Italy and chair of the Financial Stability Forum, an international banking committee.The G7 finance leaders also said growth would probably slow in their economies due to the current environment, which includes the ongoing U.S. housing decline, tighter credit conditions, rising oil prices and higher inflation.However, the finance ministers said they weren’t sure what areas would be most affected by the subprime fallout; U.S. Treasury secretary Hank Paulson also said he believed the U.S. would see growth, not a recession.