The governing body of the International Monetary Fund is meeting Saturday in Washington to discuss a weakening global economy, inflation and proposals to stabilize financial markets still reeling from bank losses stemming from the U.S. home mortgage crisis. VOA's Barry Wood reports.

The G7 finance ministers pose for a group photo at the Treasury Department in Washington, 11 Apr 2008

The finance ministers and central bankers of 24 advanced and developing countries are discussing reforms collectively advanced by the G7 group of industrialized nations - in other words Europe, North America, and Japan.

Christine Lagarde is the French economy minister.

"The fact that we are asking for more transparency, more disclosure by the banks, on the one hand; the fact that we're asking for better liquidity by the banks as well, is certainly going to help the current crisis," he said.

Lagarde spoke to Bloomberg television.

The G7 proposals are usually accepted by the IMF's governing board.

On Friday evening, U.S. Treasury Secretary Henry Paulson hosted a meeting of his colleagues from Europe, Canada and Japan along with commercial bankers impacted by the current credit squeeze, the world's most significant financial turmoil since the Asian financial crisis 10 years ago.

Addressing the IMF panel on Saturday, Paulson said the first six months of 2008 will be difficult for the U.S. economy, which may have already entered its first recession since 2001. Paulson is calling on the 185-member-nation IMF to sharpen its focus on currency exchange rates and to more closely monitor financial markets.

These weekend meetings are the regular semi-annual gatherings of the IMF's governing panel, whose developing country members - among others - include China, India, South Africa, Saudi Arabia and Venezuela.

The challenges currently facing the world economy are unusual since at the same time that economic growth is slowing inflationary pressures are rising.  Oil has touched a record $112 a barrel, and the price of rice has nearly doubled in just three months.

IMF economists expect the world economy to slow to under four percent growth in 2008, its slowest performance in five years.