French President Nicolas Sarkozy, who called the emergency meeting, said governments needed to act in a coordinated manner.

But he said he had never gone as far as to propose a pan-European rescue fund for banks -- something Berlin had balked at when talk of it surfaced a few days ago.

"We have taken a solemn undertaking as heads of states and government to support the banks and financial institutions in the face of this crisis," he told a news conference flanked by the other leaders.

The leaders' statement explicitly referred to the fact that EU rules which impose limits on national deficits also allow for exceptional circumstances to be taken into account in their application, and that such circumstances now existed.

That recognized in theory that any government which runs up a larger deficit because of money plowed into bank rescues, or maybe just because of economic downturn itself, could plead for a waiver from the EU deficit limits.

German Chancellor Angela Merkel, keen not to become bankroller-in-chief as governments seek a joint response to the crisis, said those who caused the trouble must help fix it.

Sarkozy arranged the Paris summit in the hope that a show of unity would help restore confidence in the banking sector and an economy on the brink of recession across the developed world.

In Washington, a White House spokesman said, "We welcome the European discussions and appreciate the continued attention to the situation affecting the global financial system." Manila Bulletin