Stock markets across Asia followed U.S. and European shares sharply lower, in reaction to the collapse of the investment company Lehman Brothers. The markets in Tokyo, Seoul and Hong Kong - which were closed Monday for a holiday - led the selling. VOA's Kate Pound Dawson in Bangkok has more.
Central bankers and national leaders around Asia rushed to assure the public that their economies were sound and that there was plenty of cash available to keep their financial systems flowing. Even so, investors continue to sell shares.
In much of the region, financial companies examined their balance sheets for any exposure to the American investment bank Lehman Brothers, which filed for bankruptcy Monday. There also are fears of massive losses at other international financial companies, such as the insurance giant AIG.
The Bank of Japan released $24 billion into the banking system, to make it easier for financial companies to borrow the cash they need.
Jake van der Kamp is an independent market analyst in Hong Kong. He says the crisis is the worst in decades and could be prolonged.
"Global markets haven't seen anything like this in such a long, long time that it's hard to but any figure on it at all," he said. "I would say you've got a matter of months before you start to build a bottom yet [before markets stop falling]."
The crisis began nearly 18 months ago in the United States, as many people who had taken out so-called "sub-prime" mortgages - home loans made to weak borrowers - struggled to pay their debts. Billions of dollars worth of those mortgages had been packaged into complex securities that the world's banks, insurance companies and investment funds had bought. As the securities started to fall in value, investors around the world sold out of bond and stock markets.
Van der Kamp says Asia has a few advantages over other markets. He says, Asian financial markets usually recover faster than do the older, more established markets of Europe and the United States.
Another advantage is that Asia's overall exposure to the sub-prime crisis is moderate and well secured.
"Because the Asian exposure would largely be Asian central banks, which have massive reserves, starting obviously with China and Japan, but all the rest, relative to the size of the economies, massive reserves, heavily in U.S. dollars," he said. "There's probably not all that much direct danger."
Still, investors around the region on Tuesday counted up the toll from Wall Street's woes.
Japan's Nikkei stock index sank almost five percent, to its lowest point in more than three years. Hong Kong's Hang Seng index slumped nearly 5.5 percent and Seoul's Kospi lost slightly more than six percent. Both markets were at their lowest points since early 2007.
Other markets also were rattled, with oil prices slumping more than $3 to just above $92 a barrel in Asian trading, as fears grew of a severe global recession. That is its lowest level since February.