HIGHLIGHTS-G7 leaders comments after meeting

 WASHINGTON, Oct 10 (Reuters) - Group of Seven financial
officials said on Friday that they would work together to do
everything necessary to free up credit and money markets,
saying the current situation called for urgent and exceptional
action.

 The group was meeting ahead of an Oct. 11-13 gathering of
finance ministers and central bankers from around the globe at
the annual meetings of the International Monetary Fund and
World Bank.

 Following are highlights of comments by the G7 leaders.

 U.S. TREASURY SECRETARY HENRY PAULSON

 In prepared statement:

 "I briefed my colleagues on the work we are pursuing to
implement swiftly and thoughtfully the new financial rescue
package. We are developing strategies to use the authority to
purchase and insure mortgage assets and to purchase equity in
financial institutions, as deemed necessary to promote
financial market stability. As we develop plans to purchase
equity, as in the approach we are taking to broad mortgage
asset purchases, we are working to develop a standardized
program that is open to a broad array of financial
institutions. Such a program would be designed to encourage the
raising of new private capital to complement public capital.
Consistent with the legislation, any equity the government
purchases through a broadly available equity program would be
on a non-voting basis, except with respect to the market
standard terms to protect our rights as investors."

On the need for both equity and asset purchases

 "There's no doubt in our mind given the magnitude of the
issue -- the challenge -- that we can use the taxpayers' money
more efficiently and have it go farther and get more for their
dollars and more protection if we develop a standardized
program for making and encouraging equity participation.

 On different approaches by different countries

 "Some in the press, some in the markets are naive, if they
think that different countries, with different financial
systems, economies in different stages of development,
economies with totally different structures, different sizes,
different political structures, and different laws are going to
come out up with precisely the same policies to deal with the
issues. But what stood out to me was that everyone said the
same thing: 'Here are the issues we've got to deal with, let's
learn from each other, let's stay in communication. Let's go
about developing these as soon as we can."

On liquidity:

"The immediate focus is on liquidity and it is on supporting
and understanding the systemic risks and supporting our major
financial institutions while we are working as quickly as
possible to unveil the capital part of the plan."

On Goldman Sachs and Morgan Stanley:

 "We did not speak to any specific firm today. We spoke
about firms that were important and important systemically. One
thing I explained to my colleagues, and I've been very
consistent; in July when I was in front of Congress I was very
clear that we didn't have the kind of wind-down resolution
authorities for non-bank financial institutions we needed.

 "We don't have any investment banks left today. We have two
bank holding companies, in Morgan Stanley and Goldman Sachs,
and we have a new set of authorities in the TARP. And so we
talked about it in that context."
  On foreign investors in the U.S.:

"We are in close coordination and communication with Japan
and China and other investors around the world. I think people
have been very mutually supportive."

ON how long turmoil will last:

"I think we'll have some volatility for a while...this is
about confidence. We need to restore confidence. There is every
reason for people around the world to be confident, in my
judgment."

ECB PRESIDENT JEAN-CLAUDE TRICHET

On G7 statement:

 "We have a very, very concise plan of action."

 "I think it is some kind of concision and precision that is
up to the challenges of the present time."

On the rate cuts:

"The global decision of central banks to decrease rates
because we had inflation expectations under control and the
most recent events had confirmed the risks to price stability
had decreased."

On actions taken so far:

"We have taken a lot of actions in the past week. We are
continuing to take action in the past week and we have taken
action just a few days ago...a lot of action has been also
taken. We have to say it is an ongoing part of decisions."

On accounting standards:

 "What is very important is to be sure there was convergence
of the regulations and rules as regards accounting on both
sides of the Atlantic that is being done on the European side
in a very expeditious and accelerated manner."

On why markets are distressed:

"My experience of markets is that it always takes a long
time for markets to capture all the elements of the decisions
we are making.

"It is normal there is a maturing process"
EUROGROUP CHAIRMAN JEAN-CLAUDE JUNCKER

On Eurogroup meeting:

"We welcome the initiative of President Sarkozy to convene
 a meeting of heads of government of Eurogroup on Sunday
night."

On fiscal discipline:

 "We would like to stick to the basic rules of the pact, in
no way does it mean a loosening of the rules."

FRENCH ECONOMY MINISTER CHRISTINE LAGARDE

On G7 statement:

 "This G7 meeting took place in exceptional circumstances
and you have in front of you a statement that is itself
exceptional. You're used to having long, dense, three-page
statements that resemble each other from one G7 to the next.
Here you have a one-page document with five main points"

 "What are the messages of this statement. First of all that
we are all aware of the seriousness of the situation."

 "We wanted to send a very clear message to the markets, to
tell them to stay calm and reject irrational behaviour"

 "The second message is that we are ready to act"

On steps to be taken:

"Central Banks in the G7 countries will take all necessary
actions in a coordinated manner so that banks and financial
institutions have ample access to liquidity to re-establish
normal functioning of the markets."

 "Actions will not lead to competition distortions, the
interests of taxpayers will be preserved. Shareholders and
management of the institutions to be supported will assume
their share of responsibility."

 "We will cooperate closely with the authorities in
developing countries to limit the impact of the crisis on their
economies."

 "We need common rules of action whose implementation should
be carried out by each member country at national level."

 "We agree on the tools that we have to use to reinforce
liquidity...and we also agree on the need to act in a
coordinated manner."

On French banks:

 "At the level of France, all establishments are considered
as systemic"

On whether the U.S. had been blamed by partners for crisis:

 "We concentrated above all on the need for action and the
stability and confidence that had to be restored so we
deliberately chose to say what we wanted to say to each other
within four walls and that will stay within those four walls
and will not be shared. For the rest, deciding who was
responsible isn't the top priority."

On accounting rules:

"The SEC has given a much more flexible interpretation of
the principle of mark-to-market and we hope the European
Commission will adopt the same reading and that national
accounting authorities adopt the same interpretation as far as
valuation of assets is concerned."