Major US banks reported huge losses and other data painted a grim outlook for the US economy yesterday as Europe vowed to shield its industries from the global crisis that hammered markets again.

EU leaders pushed plans for a global summit to overhaul the world financial system, as Switzerland took on $60 billion of bad debt from UBS and European stocks fell.

"The whole cliche of Wall Street arriving on Main Street is so true now, with recession in the US, the UK, Europe and probably Japan, and significant slowing elsewhere," said Bernard McAlinden, strategist at NCB Stockbrokers in Dublin.

At a meeting in Brussels, EU leaders vowed action to underpin growth and jobs threatened by the global financial crisis, but ruled out spending their way out of recession with a Europe-wide stimulus package.

French President Nicolas Sarkozy, who chaired a two-day EU summit, urged Europe to show the same unity in addressing the economic slowdown as it had in taking coordinated action to rescue banks and stabilize the financial system.

Switzerland's two largest banks - UBS and Credit Suisse - became the latest to say they were receiving emergency funding as the country's government and other investors moved to shore them up.

The Bank of England said it would create two new facilities for banks to access funds beginning next week, which should remove the stigma attached to using its emergency lending system.

On Wednesday, the ECB said it will allow banks to swap a larger range of their assets for central bank funds and offer more funds across a range of currencies.

London interbank offered rates (Libor) for dollars, euros and sterling fell across all maturities yesterday, with the exception of overnight euro Libor.

Banks' unwillingness to lend to each other has been at the heart of the credit crunch so any sign of easing in rates there could indicate at least some recovery in confidence.