The Group of Seven nations is committed to taking coordinated action to ensure liquidity and to support financial market functioning, financial stability and economic growth, G7 finance ministers and central bank governors said in a statement.

These actions, together with continuing fiscal discipline efforts will enable long-term fiscal sustainability, the statement released early on Monday said.

No change in fundamentals warrants the recent financial tensions faced by Spain and Italy. We welcome the additional policy measures announced by Italy and Spain to strengthen fiscal discipline and underpin the recovery in economic activity and job creation, it added.

Senior officials conferred by phone before Asian financial markets opened as financial crises on both sides of the Atlantic threatened to escalate.

In separate efforts aimed at preventing panic, the European Central Bank signaled it would start buying Italian and Spanish debt, while U.S. Treasury Secretary Timothy Geithner said Treasury securities are just as strong as they were before a potentially damaging debt downgrade by Standard & Poor's on Friday.

G7 officials said in their statement they would consult closely with regard to action in foreign exchange markets and would cooperate as appropriate on foreign exchange.

Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability, they said.

(Reporting by Geert De Clercq; Editing by Michael Roddy and Chizu Nomiyama)

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