Shinichi Tamura, a banking analyst at UBS Securities Japan, said: "The entire financial sector is volatile."

The concern is that if the banks become increasingly reluctant to provide funds, the broader economy will slow since businesses will not be able to finance their operations.

In research carried out by Morgan Stanley, analysts sounded a note of optimism: "The jury is still out on the potential economic fallout resulting from this tightening of credit.

"Although we expect the direction is down, we think the global impact will fall well short of recession."

On Friday, the US Federal Reserve put $38bn into the US banking system, its biggest operation since shortly after the September 11, 2001 attacks.

The European Central Bank put $212.98bn into the eurozone banking system on Thursday and Friday.

The concerted action helped to reassure investors, with Wall Street staging a late recovery on Friday to end only slightly lower after heavy early losses.

Japanese share prices staged a modest rebound on Monday, with the  benchmark Nikkei-225 index of leading shares up 47.26 points at  16,811.35 in early deals, after plunging 2.37 per cent on Friday to a  near five-month low.