A worldwide meltdown of credit markets accelerated overnight as BNP Paribas, France's largest bank, became the fourth major bank to suspend redemptions in major multi-billion dollar investment funds because of the bursting of the mortgage sub-prime credit bubble in the U.S.

The Dow Jones Industrial Average ended down today 387.18 points in a broad market sell-off.

According to Bloomberg News, BNP Paribas announced redemptions in these funds were suspended because, "The complete evaporation of liquidity in certain market segments of the U.S. securitization market has made it impossible to value certain assets fairly regardless of their quality or credit rating."

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"For some of the securities there just are no prices," Alain Papiasse, head of BNP Paribas's asset management and services division said in an interview reported by Bloomberg. "As there are no prices, we can't calculate the value of the funds."

As of July 27, BNP Paribas had 2 billion euros in assets – approximately $2.76 billion – in the troubled funds, including. 700 million euros in sub-prime loans rated AA or higher, according to Bloomberg.

World stocks tumbled after the BNP Paribas announcement.

The Financial Times reported that in response to the crisis, the European Central Bank took emergency measures and injected 94.8 billion euros in reserves as part of an unlimited cash offer to financial institution borrowers at its main lending rate of 4 percent. The development came after overnight rates shot up to 4.7 percent, their highest in nearly six years.

The Federal Reserve this morning added nearly $12 billion to banking reserves to help settle a growing worldwide credit crisis that has expanded over the past few weeks from the initial wave of bankruptcies in the sub-prime U.S. mortgage market.

WND previously reported fears a global credit bubble could burst as troubles first apparent in the sub-prime mortgage market spread to collateralize loan obligations generally.

Today's worldwide equity sell-off signals the credit bubble burst now threatens to impair stock prices globally.

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