Chancellor demands coordinated response

The chancellor, Alistair Darling, has called for policy makers to act swiftly in the face of current global financial problems.

Interviewed in the run-up to a Paris summit with his key European counterparts, Mr Darling outlined the need for a coordinated response from central banks, alongside decisive action at national government level.

In Paris he will meet with the finance ministers of France, Italy and Germany to discuss further cooperative action.

Following upheavals in the American sub-prime mortgage market, European banks have been increasingly unwilling to lend to each-other, leading to a 'credit crunch' where consumers and businesses have found it harder to borrow money.

In December, central banks including the Bank of England and the European Central Bank made more than a hundred billion dollars available to money markets to improve their liquidity.

Commenting on the action, Mr Darling said: "This co-ordination is beneficial. What markets want, above all, is to know that central banks are aware of their problems."

In a separate statement, the Treasury has also insisted that any response to the current financial instability "must be international". It seems likely that the Paris summit will discuss ways of involving the International Monetary Fund (IMF) to build a global response to similar problems.