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US treasury secretary Timothy Geithner said he was noticing small improvements in indicators of financial stability.

In a statement released after meeting with members of the G7, Mr Geithner spoke of the need to continue global action to tackle the problems of the financial crisis.

While warning that there was still a lot of work to be done, he said he had noticed reductions in the rate of decline of trade flows and economic activity. He added that there was less instability in the US housing market and spending in sectors of the US economy was also picking up.

He said: "We are right to be somewhat encouraged, but we would be wrong to conclude that we are close to emerging from the darkness that descended on the global economy early last fall."

Mr Geithner added that the "severe downturn" in the global economy was likely to be "more virulent and long lasting" as measures taken to address the problems had to taken into account the effects of the preceding "long period of increased borrowing and leverage in the global system".

The US treasury secretary called for more coordinated action to repair national financial systems and to reform international organisations tasked with overseeing financial stability.

He also stressed the need to tighten domestic regulatory systems to create a system that could deal with the "needs and complexity" of modern finance.

Mr Geithner is hosting a series of meeting with other top national finance officials in Washington this weekend.