The International Monetary Fund said Saturday it was ready to lend to countries in need of capital, as the 15 eurozone economies and Britain redied a Paris summit to seek a joint response to the global financial crisis.

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IMF head Dominique Strauss-Kahn said the world's reeling financial system was teetering on "the brink of systemic meltdown".

"It is so important that the first coordination took place today in the IMFC when emerging market economies and low-income countries agreed with the principles and actions decided by the G7," he said at a news conference on the first day of annual International Monetary Fund and World Bank meetings in Washington.

"The first coordination between advanced countries and the rest of the world is now on track," Strauss-Kahn added.

The IMF's International Monetary and Financial Committee (IMFC) said in a statement: "Using its emergency procedures, the Fund stands ready to quickly make available substantial resources to help member countries cover financing needs".

The governing body called for "further intensive Fund engagement across the membership to discuss and develop robust policy responses to the crisis."

The IMFC "strongly endorsed" a five-point action plan agreed by the Group of Seven (G7) major economies Friday that pledged cooperation, decisive action and the "use of all available tools to support systemically important financial institutions and prevent their failure."

The IMFC statement came as the IMF and the World Bank hold annual meetings this weekend in Washington against a backdrop of the worst financial crisis since the 1930s Great Depression.

Bush: ‘serious global response’

US President George W. Bush said Saturday the world's richest economies were united on a "serious global response" to the financial meltdown.

"We will stand together in addressing this threat to our prosperity. We will do what it takes to resolve this crisis. And the world's economy will emerge stronger as a result," he said.

But Bush unveiled no new proposals after meeting with G7 finance ministers and the heads of the IMF and World Bank for about 40 minutes.

"All of us recognise that this is a serious global crisis and therefore requires a serious global response for the good of our people," Bush said.

The ministers, from Britain, Canada, France, Germany, Italy and Japan, stood somberly behind Bush, as he warned against any "beggar-thy-neighbor" policies like those blamed for deepening the Great Depression of the 1930s.

G7 to work with G20

And he said the G7 would work with an enlarged forum known as the Group of 20 that includes other major economies like China, Brazil, India and Russia, also holding crisis talks in Washington Saturday.

French President Nicolas Sarkozy and German Chancellor Angela Merkel met Saturday in France, putting on a show of unity the day before a Paris summit of the leaders of the 15 eurozone economies as well as British Prime Minister Gordon Brown.

The heads of the eurozone's two biggest economies are seeking a joint response to the crisis, which may include a British-style plan of partial bank nationalization.

"We are analysing the crisis together. Germany and France have perfectly identical views on the consequences to take from that for the short, medium and long term," Sarkozy said.

Merkel agreed Paris and Berlin were "on the same path as regards putting in place a concerted and coherent reaction for the eurozone" but noted that within this there was "naturally room for manoeuvre for each member state."

Germany’s rescue plan

The German government is putting the finishing touches to a rescue plan that is expected to provide hundreds of billions of euros to shore up banks.

Germany also urged an overhaul of how the world's financial system is supervised.

"It is important to create an entirely new and global supervision of finance by the IMF," Foreign Minister Frank-Walter Steinmeier told Der Spiegel magazine due to be published Monday.

"The IMF is the only instrument established with a wide area of responsibility and high authority over the markets."
An international group of finance leaders meeting in Washington said they had made progress in implementing and already agreed tightening of the rules.

Bank of Italy governor Mario Draghi, who heads the Financial Stability Forum (FSF), said the aim is "to reconstruct the financial system to be immune to the root causes of the crisis ... we must have less debt and more capital."

Chinese banker critical

A top Chinese central banker, meanwhile, criticised rich nations for the problems in the global financial system, and called on the IMF to improve its monitoring of developed nations which had "weak financial policy discipline."