US authorities unveiled plans to inject billions of dollars into banks to ease a global credit crisis, but the move appeared to provide little relief for ailing stock markets.
Nine large banks, including Citigroup, JPMorgan Chase and Goldman Sachs, agreed to give the government stakes in exchange for new capital, as the US partly nationalises banks for the first time since the Great Depression.
"This is an essential short-term measure to ensure the viability of America's banking system," President George W Bush said in announcing the move.
He said the US government's intervention was "not intended to take over the free market, but to preserve it."
Governments around the world have been scrambling to shore up banks and restore public confidence in the global financial system, which is facing its worst crisis in decades.
Major banks have failed while others have been taken over or nationalised, amid a freeze in the flow of credit sparked by a pile-up of bad mortgage-related debt in the United States.
"The financial tsunami we now face is a global crisis," said Donald Tsang, the chief executive of Hong Kong, one of the world's financial hubs.
"Its destructive force is much stronger and more widespread than the Asian financial turmoil in 1997," Tsang said.
"The recovery will take longer, be more difficult and certainly cannot be taken lightly."
Governments have made available hundreds of billions of dollars to bail out financial institutions, leading critics to charge that the financial system keeps profits private but makes the public at large pay for losses.
