Top financial regulators said yesterday that an unprecedented reform package endorsed by the Group of Seven industrialized countries is a “first step” toward calming financial turmoil, reports AFP.

Bank of Italy governor Mario Draghi said the G7’s embrace Friday of Financial Stability Forum (FSF) recommendations lays the groundwork for the regulatory response needed to ease the severe financial stress now taking its toll on the world economy.

Draghi, who also chairs the FSF, an international group that includes central banks, the IMF and other financial and regulatory bodies, said “by and large this represents a first step in this regulatory response” to the crisis.

Macro-economic policies and liquidity are also needed, he told a news conference during the spring meetings of the International Monetary Fund and World Bank in Washington.

Draghi noted that the FSF had already begun to craft measures to improve the financial system before the US subprime home loan crisis erupted in August, roiling markets, seizing up credit and causing banks and securities firms into multi-billion dollar losses.

The G7 — Britain, Canada, France, Germany, Italy, Japan and the United States—asked the FSF in October to speed up its work, he recalled. In their own final statement Friday, the G7 finance chiefs agreed that banks should “fully and promptly” disclose their risk exposures, write- downs, and fair value estimates for complex and illiquid instruments “within 100 days.” They called for “rapid implementation of the FSF report” to not only boost the resilience of the global financial system for the longer term but also to help “support confidence and improve the functioning of the markets.”

Draghi, asked how quickly the FSF recommendations could practically be implemented, said: “The 100-days deadline is certainly a tight one. ... We’ll try our best to meet the deadline.” The FSF will report on the issue to the G7, possibly in June, he added.

The sudden nosedive in the global economy after several years of robust growth “even six months ago would have been unthinkable,” he said.

As little as eight or nine months ago, “there was absolutely no agreement whatsoever” on taking measures to improve the financial system, he said, adding that the G7 endorsement of the FSF plan “is the comforting side of all of this.”