The United States lost its top-tier AAA credit rating from Standard & Poor's, hours after investors alarmed by the euro zone debt crisis forced Italy to speed up an austerity drive.
China, the largest foreign holder of U.S. government debt, made clear that Washington only had itself to blame and called for a new stable global reserve currency.
In a sign of how concerned world leaders are about a slide in stocks that wiped about $2.5 trillion (£1.52 trillion) off global markets this week, Italian Prime Minister Silvio Berlusconi said finance ministers from the Group of Seven nations would meet in "just a few days" to seek a common plan of action.
However, his spokesman said later that the idea had not been agreed with Italy's partners but it was supported by Rome.
No other member of the group -- which does not include world no. 2 economy China -- has confirmed the meeting.
Worries the euro zone debt crisis was spreading and the United States was slipping into recession drove a week-long rout in financial markets. Better-than-expected jobs growth in July helped support Wall Street on Friday but stocks slipped back into the red in late trading.
The S&P cut in the U.S. long-term credit rating by a notch to AA-plus was an unprecedented blow and resulted from concerns about the nation's budget deficits and climbing debt burden. The move is likely to eventually raise borrowing costs for the American government, companies and consumers.
By calling the outlook "negative," S&P signalled another downgrade is possible in the next 12 to 18 months.
It blamed in part the political gridlock in Washington, saying politics was preventing the United States from addressing its deficit and debt problems, a view supported in Beijing.
"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," China's official Xinhua news agency wrote in a commentary.
"International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country," it said.
While the impact of the rating cut on financial markets when they reopen on Monday may be modest because the decision was expected, the shift may have a major long-term impact for the U.S. standing in the world, the dollar's status, and the global financial system.
"The global system must now adjust to the many implications and uncertainties of the once-unthinkable loss of America's AAA," Mohamed El-Erian, co-chief investment officer at Pacific Investment Management Co., which oversees $1.2 trillion in assets, told Reuters.