Stock markets across Europe have fallen steeply on opening after earlier dramatic share price falls in Asia.
In London, the FTSE 100 share index plunged 9.8% or 426 points on the open to 3,887.23 points.
There were similar falls across Europe - Paris was down 9% while Switzerland was down 8%.
Earlier Tokyo's Nikkei index dropped 9.6% in its biggest one-day fall since 1987, while shares in Australia, Hong Kong and Singapore all plummeted.
Despite concerted government action, investors are increasingly fearful the financial crisis will prompt a global recession.
Finance ministers from the G7 leading industrial countries are set to meet in Washington to discuss the crisis.
US President George W Bush is due to make an address to the American people later in the day.
'Deeper panic'
Heavy falls were seen across Asia's markets as a climate of fear took hold on Friday.
As the Nikkei-225 index slumped in its biggest fall in a single session since the 1987 stock market crash, the global crisis claimed its first Japanese financial institution, with the insurance company Yamato Life going bankrupt.
"Selling is unstoppable in New York and Tokyo," said Yutaka Miura, senior strategist at Shinko Securities in Tokyo.
"Investors were gripped by fear."
At the end of trading on Friday, Tokyo shares had plunged 24% during the week - double their weekly fall during the 1987 market crash.
Elsewhere in Asia was a similar story.
Australian shares closed down 8.3%, Hong Kong's benchmark Hang Seng index slumped to a three-year low, in the Philippines, share prices closed down more 8.3% while Shanghai's index was down 3.8%.
In Indonesia, plans to re-open the stock market were suspended in order to prevent what the president of the exchange called "deeper panic". Trading was halted for two days earlier this week.
'Beyond fundamentals'
As well as the G7 meeting, talks will be held at the International Monetary Fund (IMF) in Washington.
The IMF has said it is ready to lend to countries hit by the global credit crunch, using an emergency lending procedure first used in the 1990s Asian crisis.
The organisation's chief, Dominique Strauss-Khan, said on Thursday this would allow the IMF to react quickly to support countries facing funding problems.
Mr Strauss-Kahn said the world was "on the cusp of recession", but could still recover.
The IMF has about $200bn immediately available to lend to countries in need but can tap other sources.
The Dow Jones - the US benchmark index - ended down 7.3% on Thursday - tumbling below 9,000 points for the first time since August 2003.
"We're way beyond fundamentals," said Chris Orndorff, head of equity strategy at Payden & Rygel, in Los Angeles.
"This is just pure panic, that's all it is."
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