Paulson seeks global markets cooperation

By Glenn Somerville and David Lawder

WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson said on Wednesday that policy-makers around the world must keep cooperating to try to calm down financial markets but warned the turmoil would not end anytime soon.

Speaking to reporters ahead of a gathering on Friday of finance chiefs from rich nations, Paulson described markets as "severely strained" and said the scarcity of credit was pinching consumers and businesses and sapping confidence.

"Governments have and must continue to take individual and collective actions to provide much needed liquidity, strengthen financial institutions through the provision of capital ... and protect the savings of our citizens," Paulson said,

But he added, "We must also taken care to ensure that our actions are closely coordinated and communicated so that the action of one country does not come at the expense of others or the stability of the system as a whole."

Paulson and Treasury Under Secretary David McCormick briefed reporters ahead of Friday's Group of Seven gathering of finance ministers and central bankers, which McCormick said would be "heavily focussed" on financial market disruption.

As they spoke, U.S. stock prices shed the modest gains they had earlier and once again ended down.

Paulson recited the series of measures that members of the G7 -- the United States, Britain, Canada, France, Germany, Italy and Japan -- and others have taken to try to halt plunging stock prices and restore some confidence but acknowledged he had no idea when recovery would occur.

CAN'T GAUGE RECOVERY