Stock prices bombed to new lows Friday as dire forecasts drove the global financial system into one of its worst downward swings since the credit crisis began.

London's FTSE 1000 dropped by more than nine percent at one point, following dramatic losses in Asia as markets reacted with alarm at comments by the former head of the U.S. Federal Reserve who warned of a "credit tsunami."

In Moscow, trading was halted

In Asia, South Korea's KOSPI Composite Index closed down 10.6 percent Friday, while Japan's Nikkei Exchange lost 9.6 percent on news that Sony had cut its profit forecast in half.

The economic turmoil will be the focus of the two-day, 43-nation Asia-Europe Meeting, which opens Friday in Beijing, according to European Union President Jose Manuel Barroso.

Leaders hope this week's summit in China will help bring agreement on a response to the crisis ahead of a November 15 meeting hosted by U.S. President George W. Bush in Washington.

"We need a coordinated global response to reform the global financial system. We are living in unprecedented times and we need unprecedented levels of global coordination," The Associated Press reported Barroso as saying.

Full article here