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Even hours before the tense vote in the House of Representatives in Washington, European government bailouts were announced for key banks in Britain, the Benelux and Germany and a key Icelandic bank was taken over by the government.

In the United States, yet another bank collapsed, Wachovia Corp, with banking giant Citigroup intervening to buy up the bulk of its operations.

The Brazilian stock exchange in Sao Paulo suspended trading for half an hour after its Bovespa index crashed 10.6 per cent after the US vote. A second shut-down could follow if the slide reaches 15 per cent.

The three leading US stock indices shed massively: the Dow Jones Industrial Average lost 6.98 per cent; the S&P 500 shed 8.79 per cent; the Nasdaq high tech index dropped 9.14 per cent, as the final results of trading were being counted.

Stocks around the world plummeted. Amsterdam's AEX was down 8.75 per cent; Hong Kong's Hang Seng, 4.29 per cent; India's Sensex, 3.4 per cent; London's FTSE 100, 5.30 per cent; the French CAC, 5.04 per cent; Frankfurt's DAX, 4.23 per cent.

Japan's Nikkei was down 1.26 per cent.

The international turmoil was on the mind of US Treasury Secretary Henry Paulson in Washington after the stunning defeat of the finance rescue plan.   Referring to the failure of two major financial institutions in Europe, Paulson said that the stress on world markets reduced "the availability of credit that businesses across America depend on to meet payroll and to purchase inventories."

The US Federal Reserve said it would pump more liquidity into the global financial system to help alleviate the credit crunch. It increased its existing currency swaps with foreign central banks by 330 billion dollars to 620 billion dollars to make more dollars available worldwide, the Fed said.

As the US financial industry's crisis spread deeper into Europe's finance sectors, French President Nicolas Sarkozy called a meeting of bankinga nd insurance industry chiefs in his country to review the situation.

European governments moved to shore up liquidity-plagued institutions. Among the major developments:

  -- In London, the British government intervened to save major mortgage lender Bradford & Bingley (B&B) by taking it into public ownership and selling off its savings and deposits business.

  -- In Brussels, a deal was announced by the Netherlands, Belgium and Luxembourg to take over substantial parts of Belgian-Dutch banking and insurance company Fortis.

  -- In Berlin, the German Finance Ministry announced that the government and top banks were moving to inject billions of euros into troubled mortgage lender Hypo Real Estate (HRE) but that there would be no nationalization of the company.

-- In Reykjavik, the Iceland government and Glitnir bank announced thatthe state was taking a 75-per-cent stake in the bank for 600 million euros. The move was aimed to boost Glitnir's capital ratio and liquidity.

Britain's intervention in Bradford & Bingley had been expected for several days.

 "We will do whatever it takes to ensure the stability of the financial system in the wake of the nationalization of Bradford & Bingley bank," Prime Minister Gordon Brown said in a statement.

During a busy weekend in Brussels, the governments of the Netherlands, Belgium and Luxembourg hammered out a deal for each to purchase 49 per cent of Fortis's businesses in their respective countries, supplying the bank a total of 11.2 billion euros.

The plan entails the sale of Dutch banking division ABN Amro by Fortis, while Fortis chairman Maurice Lippens is to step down.

The government intervention provides Fortis with the funding it has desperately needed since its joint takeover along with the Royal Bank of Scotland and Spain's Banco Santander of ABN Amro in October 2007. Fortis' share of the takeover was 24 billion euros.

In Berlin, the German Finance Ministry said the government and top banks would inject billions of euros into troubled mortgage lender Hypo Real Estate (HRE) as it teetered on the brink of collapse.

The ministry said HRE would need a guarantee totalling 35 billion euros (50 billion dollars). The ministry stressed that no nationalization was intended at HRE.

HRE is the first major German casualty of the crisis.

In Reykjavik, Iceland's majority takeover of Glitnir bank was a comparatively small matter costing only 600 million euros.

Bank chief executive Larus Welding said the move "strengthens the capital base of the bank and removes all doubt about Glitnir's financial strength."