A frantic global sell-off sent stock indices haemorrhaging to multiple-year lows and shut down markets in Russia and Brazil as the financial crisis swept from the US across Europe.
European Union (EU) leaders sought a common response to the crisis to send a message of reassurance, but one after another, individual nations went their separate ways with corporate bail-outs and support of bank accounts.
Finnish financial authorities suspended trading of shares and other "financial instruments" issued by several banks including Glitnir bank, Kaupthing bank and Landsbanki.
In Luxembourg, the 15 eurozone finance ministers met amidst growing fears about the safety of Europe's banks and agreed there should be a European response to the crisis. European Union leaders pledged to take "all the necessary steps" to ensure the stability of the bloc's financial system and protect citizens' savings, according to a joint statement issued on their behalf by the French presidency of the EU Monday.
Such measures would include the injection of liquidity by European central banks, bail-outs for troubled banks and guarantees for deposits, the joint statement said.
The panic unfolded just days after the US government passed its $700 billion rescue plan for a finance system undermined over the past year by hundreds of billions of dollars in bad mortgage assets, which were bundled and sold as securities to firms in the US and abroad. As a result, world credit has frozen, bringing commercial lending to a near standstill.
Despite the US origins of the crisis, the US dollar rose as investors sought the security of greenbacks amidst the global chaos.
The Washington-based International Monetary Fund (IMF) has been warning for years about the overheated US housing market, and earlier this year even called for just the sort of government buy-up of bad mortgage assets that US Congress passed Friday.
Until a week ago, European leaders disputed that they would be affected by the crisis, but by Monday, they could no longer deny the global enmeshments of the system.
The crisis, which has unfolded with astonishing speed since Sep 15, has triggered calls for not only a Europe-wide system, but a world system to avoid such future calamities.
In Washington, World Bank President Robert Zoellick called for the Group of Seven (G7) industrial nations to expand to include the top 14 global economies to tackle the financial turmoil plaguing richer nations.
The crisis is expected to dominate the annual World Bank and IMF meetings this weekend in Washington.
German Chancellor Angela Merkel on Monday again rejected a proposal for a European fund to help banks in trouble made by Italian Prime Minister Silvio Berlusconi.
Instead, each country fended for itself. Germany Sunday guaranteed that an estimated one trillion euros ($1.4 trillion) in personal savings were safe, joining Italy, Austria, Sweden, Denmark, Greece, Ireland, Portugal and Belgium in backing personal accounts. Spain said it would raise its level of guarantees.
After the US approved $25 billion Friday to support its domestic auto industry, Europe's carmakers asked governments for a 54-billion-dollar loan to stay afloat as auto sales fall off.
Asian stocks nosedived. Stocks in Tokyo plunged to their lowest levels in five years, with the benchmark Nikkei 225 Stock Average shrdding 4.25 per cent and the broader Topix losing 4.67 percent.
South Korean President Lee Myung Bak proposed a financial summit with Japan and China at the Asia-Europe summit Oct 24-25 in Beijing, to try to limit the effects of the global financial crisis.
In Asia, stocks dropped as follows: China's main stock market, five percent; Thai shares, 6.4 cent; Seoul's benchmark Kospi, 4.3 percent; Hang Seng, 4.97 cent; Australia's ASX 200, 3.3 percent; Philippine shares, 2.59 percent; Indonesian stock market, 10.02 cent.
In Europe, stocks dropped as follows: CAC 40 on the Paris Bourse, 9.04 percent; London's FTSE 100, 7.85 percent; Germany's DAX, 7.07 percent; Swiss Market Index, 6.12 percent; Amsterdam's AEX, 9.14 percent.
In the Americas, the US Dow Jones Industrial Average Monday closed below 10,000 points for the first time in four years. After dipping nearly 8 per cent during trading, the Dow Jones was down 3.58 percent at closing, while the S&P 500 was down 3.85 cent.
Other stocks in the Americas declined as follows: US high-tech Nasdaq Composite index, 4.34 percent; Brazil's Bovsepa, 5.43 percent; Mexico's IPC index, 5.40 percent; Argentina's Merval index, 5.91 percent.
In Washington, US President George W. Bush repeated his warnings from last week that even with the rescue plan, it will "take a while" before the finance system feels any relief. It could take as long as four weeks before auctions begin for the troubled mortgage assets, which the US government hopes will thaw the credit freeze.