Further evidence of the banking fallout came from Switzerland's Credit Suisse, which posted a record financial loss for 2008.
US President Barack Obama's revamp of the bank rescue plan is part of his administration's blueprint to reinvigorate the world's largest economy after the financial crisis battered asset prices, dried up lending and wiped out millions of jobs.
The US crisis has reverberated around the world, pushing many leading economies into recession, raising protectionism fears and sparking waves of similar multi-billion dollar stimulus packages meant to reinvigorate sagging economies.
But doubts remain about Obama's revamped plan, which could reach $2 trillion (Dh7.4 trillion) and was developed as lawmakers consider economic stimulus plans of more than $800 billion.
The bank plan was met with skeptical market reaction, mainly because of the lack of specifics, when it was announced on Tuesday. That skeptic note spread to Asian markets on Wednesday.
The US dollar and the yen both held on to big gains as risk aversion returned to markets after US Treasury Secretary Timothy Geithner's much-anticipated bailout package.
Asian stocks fell, led by financials. The MSCI index of Asia-Pacific stocks outside Japan dropped 1.9 per cent. South Korea's KOSPI was down 0.7 per cent.
Japan markets were shut to market a public holiday.
"The economic shock is so strong that policy reactions can only buffer its impact," said Sebastien Barbe, a currency strategist with Calyon in Hong Kong.
SLUMPING IMPORTS, EXPORTS
China, like many Asian economies, is reeling from a slump in trade caused by the financial crisis, which has pushed major demand centres such as the United States, Europe and Japan into recession.
January trade data showed exports fell 17.5 per cent from a year earlier, a sharp acceleration from a 2.8 per cent dip in December.
Imports plummeted 43.1, twice as much as December, although the Chinese New Year holiday which fell in January meant there were fewer working days, making it hard to judge the severity of the underlying deterioration in trade.
But the declines were sharper than expected and mirrored big falls elsewhere in Asia, suggesting to several analysts that the world's third-biggest economy has yet to hit bottom – despite some grass shoots of recovery seen in rising metals prices.
"We will not see good export and import figures in the first and second quarters due to the slowing global economy," Zhang Shiyuan, an analyst with Southwest Securities in Beijing, said.
"Until now, I haven't seen any solid signals that the economy is recovering."
The disappointing trade data follows a fall in consumer inflation to a 30-month low in January, giving the Chinese central bank scope to cut interest rates further to prop up the economy and stave off the threat of deflation.
In Australia, a key measure of consumer sentiment slid in February, leaving room for even more support after big cuts in interest rates and a A$42 billion stimulus package last week.
South Korea said the economy shed the most jobs in five years in January, underlining market expectations the central bank would keep pushing interest rates lower on Thursday to boost the ailing economy.
Credit Suisse said its 2008 losses of more than 8 billion Swiss francs ($6.9 billion) resulted from a poor trading performance and charges to restructure the bank. However, it said its performance had improved.
"We have positioned our business to be less susceptible to negative market trends if they persist in the coming months and to prosper when markets recover," said Chief Executive Brady Dougan.
In an overhaul of last year's much-criticised $700 billion bank bailout package, Geithner said the US Treasury intends to set up a public-private fund that could absorb up to $1 trillion in toxic assets from bank.
The Federal Reserve will also extend $1 trillion of new lending as part of the plan, adding to an array of central bank programmes that Fed Chairman Ben Bernanke said has eased strains in the banking sector.
But Geithner urged patience as Washington battles what he called the worst financial crisis since the 1930s.
US lawmakers must reconcile two versions of the stimulus bill, one for $838 billion and the other for $819 billion, before Obama can sign it.
Negotiations were expected to continue into next week although the White House said it was optimistic a final bill could pass before a weekend deadline set by Obama.
European finance ministers also discussed the health of their banks as data showed industry output across the continent tumbled, including a 1.8 per cent slide in France.
EU ties were also strained amid accusations of trade protectionism as countries moved to help their own economies.
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