World stock markets are braced for further turmoil, amid reports that a US Treasury plan to stabilise troubled credit markets may have stalled.
Many have been hit by the difficulties in the US housing market
The $75bn (£36bn) scheme, designed to buy debt of questionable value to avoid panic selling, was drawn up last month with the backing of big global banks.
But it has been thrown into doubt by problems at Citigroup that forced out chairman Charles Prince on Sunday.
One US banker told the Financial Times it was now "dead in the water".
There are also concerns that downgrades of some packages of debt will lead to discount sales of some assets.
At the same time, the shortage of cash to fund takeovers is biting, with buyouts worth $202bn (£97bn) having failed this year.
The figures from Dealogic show the number falling through having more than doubled compared with the same period last year.
It comes the day after Bank of England governor Mervyn King warned that there could be further shocks to come from the credit crunch.
The credit crunch was started by record defaults among sub-prime mortgage borrowers in the US.
It turned out that much of that debt had been repackaged and sold to banks around the world.
The value of those debt packages was called into question, leaving banks reluctant to lend money to each other, because there was such uncertainty about who had the most exposure to such debt products.
The US Treasury hoped that by setting up a superfund to create a market for these debt products, it could prevent panic selling.
But according to the FT, the upheaval at Citigroup, which faces sub-prime losses of between $8bn and $11bn, has stalled the process.
There is concern that the fund may not be created quickly enough to help banks deal with their funding problems.
The situation is worsened by warnings from the credit rating agency Fitch, which said earlier this week that it may have to downgrade some of the biggest insurers of bonds in the US.
If that were to happen, some of the bonds that they insure would also be downgraded, so that pension funds and other institutions that hold them would look to sell in a hurry.