The world's rich nations has vowed to take all necessary steps to unfreeze credit markets and ensure banks can raise money but they offered no collective course of action to avert a deep global recession.

In a surprisingly brief statement following a 3-1/2 hour meeting on Friday, the Group of Seven stopped short of backing a British plan to guarantee lending between banks, something many on Wall Street saw as a vital step to end 14 months of turmoil and growing panic on financial markets.

'The G7 agrees today that the current situation calls for urgent and exceptional action,' the United States, Canada, Britain, France, Italy, Germany and Japan said.

After the meeting, U.S. Treasury Secretary Henry Paulson said Washington was developing plans to buy equity stakes in financial institutions as a way to repair balance sheets damaged by huge credit losses.

The finance leaders agreed to use all available tools to support 'systemically important' financial institutions and prevent their failure, and ensure banks can raise capital 'in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses.'

Analysts said the statement was unlikely to allay the sense of panic that has swept through global markets in recent weeks after Lehman Brothers tumbled into bankruptcy and triggered a wave of risk aversion that left banks hoarding cash.

The Dow Jones industrial average .DJI on Friday took a 1,000-point roller-coaster ride before ending down 1.5 percent at 8,451.19 as investors tried to pin down what might come out of the G7 gathering and other meetings of world finance officials in Washington this weekend.

'The markets wanted maybe more assurance that there would be a unified global backstopping of the banks, and it doesn't sound like that's in there,' Kim Rupert, managing director of global fixed income analysis at Action Economics, said of the statement from the seven economic powerhouses.-Reuters