In a statement late yesterday in Washington the Group of 20 finance chiefs pledged to address the renewed challenges to the global economy in a step to clamp market tension after the huge selloff seen yesterday on rising recession woes.

The policy makers said that they are committed to a strong and coordinated international response to address the renewed challenges facing the global economy and to ease the debt woes the euro area officials also vowed in the statement to increase the flexibility of the EFSF and to maximize its impact in the upcoming group meeting on October 14-15.

The finance chiefs surely highlighted the market tension and the debt crisis among the risks to growth and assured that they will act swiftly to ensure adequate market liquidity and that banks are capitalized.