Losses on stock markets have continued after the collapse of fourth largest US investment bank, Lehman Brothers, which has filed for bankruptcy protection.
European stocks fell again; the UK's FTSE 100 was down 4.4%, France's Cac down 2.9% and Germany's Dax down 3.2%.
Shares in Japan, South Korea and Hong Kong fell more than 5%, having been shut on Monday for public holidays.
Lehman, which may be about to sell its core assets to Barclays, is the latest victim of the global credit crunch.
The FTSE 100 of leading UK shares fell 1230 points to 4,975 in early afternoon trade. Banking shares were particularly hard hit, with HBOS shares 35% lower.
Japan's benchmark Nikkei 225 index dropped 5% to a three-year low, shares in South Korea and Hong Kong shed almost 6% in value and Shanghai's index fell by about 3%.
Markets in Taipei and Singapore were also sharply down, and the pattern was repeated in Australia and New Zealand, although the falls were smaller.
The US stock market on Monday had its worst day's trading since 9/11, with the Dow Jones index ending the day down 504.48 points, or 4.42%, at 10,917.51.
Central banks around the world have been carrying out emergency measures on Tuesday to keep markets liquid.
The moves came as the interest rates at which banks lend to each other rocketed - as they did at the start of the credit crunch. This is seen as a sign of falling confidence between the banks.
There was a bailout with federal portfolio risk guarantees for the acquisition of Bear-Stearns, but not a parallel thing for Lehman Brothers. The politics of such decision making probably will surface if the distinction was politically motivated. The explanation I have seen is that Bear-Stearns was a precipitous unanticipated happening whereas Lehman Brothers was a situation recognized for quite some time. That seems to be blowing smoke, and I expect looking either at the persons and firms involved in one instance vs the other, or at possible portfolio differences might be informative. Also, sequencing might be the difference -- the Freddie and Fannie government intervention was an event between the two collapse situations, and might have influenced things - a view that the first difficulties might be patched, then a recognition of a systemic change needed, then Lehman reaching a clear failed firm status after the systemic intervention and after the earlier patching attempt at stabilizing market impacts. Reader views are welcome.