With Lehman Brothers declaring bankruptcy, Merrill Lynch merging with Bank of America and other financial firms including AIG and Washington Mutual apparently in danger, indexes endured one-day falls yesterday unmatched since 9/11.
The Dow Jones dropped over 500 points, or just under five per cent.
Today, the Asian markets - which were mainly closed for public holidays yesterday - endured sharp falls.
Japan's Nikkei 225 index dropped five per cent, while its South Korean and Hong Kong equivalents retreated six per cent.
With the US still to open, the European markets were also enduring their second day of decline.
London's FTSE 100 is down a further 3.14 per cent, while Frankfurt's Dax 30 has fallen by 1.81 per cent.
Speaking at a press conference in Cairo, IMF head Dominique Strauss-Kahn said that banks' troubles were far from finished.
"What we see in Lehman Brothers is something that started months agoâ¦so the consequences for the financial sector are not over and we are going to see more of that," he commented.