Britain announced plans to inject up to 50 billion pounds ($87.2 billion) into its biggest retail banks on Wednesday and Hong Kong slashed interest rates to try to stem the global financial crisis.

British finance minister Alistair Darling said he wanted to reduce the 'fear factor' in the banking system. In an effort to kickstart stalled money markets, the Bank of England will offer at least 200 billion pounds in short-term lending.

Hong Kong followed Australia's lead in slicing a full point off interest rates as pressure grew for a coordinated, global monetary policy response to the biggest financial crisis since the Great Depression.

Shares in Tokyo plunged more than nine percent, the biggest decline since the 1987 stock market crash, on growing fears that the chaos in credit markets will foster a global economic recession.

European shares fell 4 percent in early trade. US stocks had tumbled for a fifth straight session on Tuesday, completing a record five-day point loss.

Britain's offer to use public money to take stakes in some of its best known high street banks follows a slump in which some have lost nearly half their value on the stock market amid investor fears they could collapse.

'Extraordinary times call for bold and far-reaching solutions,' British Prime Minister Gordon Brown said in comments released by his press office.

Federal Reserve Chairman Ben Bernanke said on Tuesday the US economy was being battered by a financial crisis of 'historic dimension' and that the risk for inflation has eased with the falling prices for oil and other commodities.

His comments were seen as paving the way for a deep cut in US rates, possibly before the Fed's end-of-month meeting.

The Bank of England will deliver its latest interest rate decision on Thursday and Darling dropped a heavy hint he would welcome a rate cut.

'Let me remind you of the remit ... yes it's to target the government's inflation target, but it's also to support the government's wider objectives of economic stability,' he told BBC radio.

Around the globe, people are worried about safeguarding savings and keeping their jobs as some of the pillars of international finance give way.

The upheaval that began on Wall Street has effectively shut down interbank and other loan markets. Stemming from the collapse in the US housing market and increase in bad loans, the crisis is the worst financial storm in almost 80 years.

The deteriorating outlook for the economy and the deepening financial crisis are pushing fears to their limit,' said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management in Japan.

In the latest sign of gloom, corporate bankruptcies in Japan jumped 34.5 percent year-on-year, a research firm said.

Hong Kong unveiled a 100 basis point rate cut, a day after Australia made its steepest cut in 16 years.

Kirby Daley, senior strategist at Newedge Group in Hong Kong, said central banks should act in a concerted effort to back the interbank lending market, which has all-but frozen.

He called the Fed's move on Tuesday to buy commercial paper a good first step, but said the outlook remains grim.

'We're sitting between the abyss, which is the unthinkable, which is the breakdown of the financial system, or a deep and sustained recession, that will cause lower equity valuations to persist for the next 12 to 18 months,' he said.

Fed fund futures have priced in a half-point Fed rate cut this month, with a 75-basis-point cut an outside possibility. Expectations have built that a weekend meeting of Group of Seven officials in Washington could set the stage for coordinated rate cuts.

US presidential candidates John McCain and Barack Obama sparred over taxes and the economy on Tuesday in Tennessee, during a head-to-he