US President Bill Clinton has launched a fresh initiative to tackle the world financial crisis, calling on rich nations to support an emergency fund to help the hardest-hit countries.

The plan aims to head off fears of a global credit crunch and is expected to dominate today's meeting in Washington of finance ministers and leading central bankers from the Group of Seven industrialised nations. Mr Clinton said the world faced it most serious financial challenge for 50 years. The US idea is to create a mechanism anchored in the International Monetary Fund to provide contingent funds to help countries to ward off continuing shockwaves from the Asian financial crisis.

Separately, discussions continued about a large financial package for Brazil, which holds presidential elections on Sunday.

The G7 meeting marks the start of five days of intense discussions among officials and bankers from around the world at the annual meetings of the International Monetary Fund and World Bank.