The nerves have returned as Wall Street opens sharply lower, despite the rescue plan for insurance giant AIG.
With three-month dollar Libor - the rate at which banks lend to each other - jumping again, concerns about liquidity and financial institutions not being able to raise the funds they need have returned to the fore. So the likes of Morgan Stanley and Goldman Sachs have fallen more than 10%, despite reporting better than expected results yesterday.
A surprise move by the Bank of England to extend its special liquidity scheme - something governor Mervyn King ruled out last week - has done little to smooth things over. The Bank said it was making the move because of the current market volatility.
So the Dow Jones Industrial Average has fallen around 170 points, while the FTSE 100 is up just 0.9 points at 5026.5.
HBOS is currently down 12p at 170p despite confirmation of merger talks with Lloyds TSB, 20.5p higher at 300.25p. Royal Bank of Scotland is 5.9p lower at 183.2p, on funding fears.
