Wall St giants buried in global stock market panic

By Emily Kaiser and Claudia Parsons

WASHINGTON/NEW YORK (Reuters) - Finance chiefs of the world's rich nations pledged on Friday to prevent big banks from collapse and to work together to stem the financial crisis after another day of gut-wrenching drops on world markets.

"The current situation calls for urgent and exceptional action," finance ministers and central bankers of the Group of Seven major industrialized nations said following their meeting in Washington. They pledged to use "all available tools," but did not announce specific measures.

Reeling from the loss of trillions of dollars of wealth, investors worldwide had pinned their hopes on decisive action from the G7. U.S. stocks pared massive losses in a late recovery after a day of sharp moves.

And U.S. Treasury Secretary Henry Paulson, warning that the United States was facing a prolonged period of uncertainty, said Washington was developing plans to purchase equity stakes in financial institutions.

Japan's finance minister also said that Japan was considering injecting capital into banks.

Such moves would be similar to measures that Britain has announced to put money into struggling banks.

The G7, meanwhile, said it would work to get financing flowing.

"We commit to continue working together to stabilize financial markets and restore the flow of credit, to support global economic growth," officials of the G7, which includes the United States, Canada, Britain, France, Italy, Germany and Japan, said in a statement.