INSTANT VIEW: Analyst reaction to G7 statement communique

NEW YORK (Reuters) - The finance ministers of the Group of Seven top world industrial countries committed themselves to use all available tools to systemically support the global financial system and ensure banks have the capital and liquidity they need.

In their communique after the G7 meeting in Washington DC on Friday the ministers said that they would ensure that national deposit guarantee programs were consistent and that they would take action to restart the secondary markets for mortgages and other securitized assets.

However, the five-point statement contained little further detail.

ANALYSTS REACTION:

ROSS STARR, PROFESSOR OF ECONOMICS, UNIVERSITY OF CALIFORNIA, SAN DIEGO:

"There is obviously panic in the market and palpable fear of a significant worldwide recession based on the notion of a worldwide credit crisis.

"The good news is that financial authorities and the governments of Europe and the United States have agreed to act.

"Paulson's had his package for all of a week and the markets are a little impatient. If credit eases up that will be good news for the American economy and the world economy, but we've already locked in a recession for 2008. The issue is how long it lasts into 2009."

ALBERTO BERNAL, HEAD OF EMERGING MARKETS MACROECONOMIC STRATEGY, BULLTICK CAPITAL MARKETS, MIAMI:

"I don't see any specifics but the specifics you want to hear are first insurance for overnight transactions and capitalization of banks through non-dilution methods."

"You don't want to kill the private holders of bank stocks just for the sake of appeasing politicians. If they did that, this would all be a non-starter.

"So far, I like the language, it is aggressive, but there are no specifics and we need to wait for those.

KIM RUPERT, MANAGING DIRECTOR OF GLOBAL FIXED INCOME ANALYSIS, ACTION ECONOMICS LLC, SAN FRANCISCO:

"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. This week has been absolutely brutal. The volatility is just chopping up traders, strategists, everybody. If this is the extent of it from G7, then we could be in for more trouble on Monday."

JOHN LONSKI, CHIEF ECONOMIST AT MOODY'S CAPITAL MARKETS GROUP:

"Whether you like or not, there will be something substantial aimed at getting banks to lend to each other again. ULtlimately, some version of too 'big to fail' will prevail.