LONDON (AFP) — Can G7 leaders on Monday do what their central bankers have failed to, in arresting the pandemic panic gripping global financial markets? Further steep falls on the world’s leading stock indices have exposed the limitations of official action, despite a round of emergency steps announced by central banks on Sunday.

Now it is over to crisis videoconference talks Monday among G7 heads of government including President Trump, and separately of eurozone finance ministers.

“There’s an understanding in markets that a recession is almost guaranteed. Authorities throwing money at it helps but cannot stop it,” said Jasper Lawler, head of research at traders LCG.

Dusting off their playbook from the 2008 financial crisis, the U.S. Federal Reserve, European Central Bank, the Bank of Japan and others on Sunday announced emergency measures to try to keep dollars pumping through the arteries of the global economy.

In addition to joining the other central banks in enhancing global liquidity swaps, the Fed slashed its key interest rate to virtually zero, and announced massive asset purchases along with more help to encourage bank lending.

But unlike the banking shock of 2008, which was readily quantifiable, Covid-19 remains an invisible enemy and the global economy could get much worse as national lockdowns take hold.

“A significant downturn is looming over the coming months, the only question is how deep it becomes,” said Neil Shearing, group chief economist at Capital Economics.

Despite the central banks’ efforts to inject some calm, markets in Asia and Europe resumed their giddying declines on Monday and U.S. futures looked troubled.

“Central banks led by the U.S. shot off a bazooka of lower interest rates and quantitative easing but it has missed (the) target. Markets are back into freefall,” Lawler said.

The scale of the crisis was laid bare as industrial production for January and February in China — ground zero of the pandemic — shrank by 13.5%, the first contraction there in around 30 years.

Shares in airlines crashed after carriers in Europe and the United States announced dramatic cuts to their flight capacity.

Analysts are looking to the G7 and eurozone ministers to announce concerted stimulus plans, again evoking the response to the 2008 crisis.

Unlike then, banks’ balance sheets are healthy, according to Stephen Innes, global chief markets strategist at AxiCorp, a foreign exchange trader.

“But this is a global economic crisis which needs swap lines to airline companies, oil companies and retailers,” he said.

“Airlines might be at the top of the list for directed fiscal help, but virtually every global industry is facing pressure without a government bailout.”

Above all, investors want something governments in Europe and the United States have proved unable to deliver — a fall in new coronavirus cases similar to the trend in China.

“There’s a lot coming globally from central banks but of course now … it’s over to governments to act more aggressively in terms of fiscal stimulus,” said Derek Halpenny, head of research for global markets at MUFG, a Japanese bank holding and financial services company.

“That is going to be the key going forward, obviously along with the Covid-19 daily data, in terms of where we go (for) investor sentiment,” he said in a podcast.

European stock markets went into freefall early Monday despite the massive fresh central banks’ stimulus.

Paris dived 9.0%, Frankfurt plunged 7.8%, London and Milan tumbled 7.6%, while Spain retreated 8.7%.

© Agence France-Presse