KEY POINTS:
New Zealand's sharemarket will this morning be the first in the world to react to a weekend of rescue attempts aimed at averting a meltdown of the global financial system.
As New Zealand and Australia rushed to guarantee bank deposits yesterday, the International Monetary Fund said it backed a Group of Seven plan to try to stabilise markets.
It urged "exceptional vigilance, co-ordination and readiness to take bold action" to contain a firestorm that has pushed share prices around the world to five-year lows.
The United States appealed for patience but the IMF said time was short after the Group of Seven industrialised nations failed to agree at a meeting on Friday on concrete measures to end the turmoil.
"Intensifying solvency concerns about a number of the largest US and European financial institutions have pushed the global financial system to the brink of systemic meltdown," warned IMF chief Dominique Strauss-Kahn.
In other moves triggered by the world financial crisis:
* Britain is expected this week to start its biggest retail bank rescue when the four largest banks - HBOS, Royal Bank of Scotland, Lloyds TSB and Barclays - ask for a combined £35 billion ($102.5 billion) lifeline.
* France and Germany last night promised to produce detailed plans today at a European summit in Paris to address the crisis.
* America's No 1 and No 3 carmakers, General Motors and Chrysler, began talks on a possible merger.
* Oil's price fell US$9 to US77.70 a barrel, the lowest level since September 10 last year.
France promised that a meeting of European leaders in Paris would detail measures to keep market panic from triggering the most severe global downturn in decades.
French President Nicolas Sarkozy and German Chancellor Angela Merkel, meeting in France, said they had proposals to try to restore normal flows in blocked credit markets, which they would present at the European summit.
The French Economy Minister, Christine Lagarde, said the meeting would go beyond talking about remedies to "put meat, muscles on the bones of that skeleton and develop, follow up and execute on it."
In an interview with the Observer newspaper, British Prime Minister Gordon Brown said he would try to broker a Europe-wide bailout of banks modelled on Britain's intervention.
He said the "stakes could not be higher" for jobs, mortgages and the future of the economy.
On Saturday, media reports said Germany was readying a rescue package worth up to US$550 billion, including putting equity capital worth "double digit" billions into its banks and guarantees for interbank lending.
The G7 rich nations vowed on Friday to take all necessary steps to unfreeze credit markets and ensure banks could raise money but gave no specifics on collective action.
- ADDITIONAL REPORTING: AGENCIES
