PARIS (AFP) - Governments rolled out fresh measures Thursday to shield businesses and banks from the financial maelstrom as deepening fears of a global recession ensured another battering for stock markets. As new figures showed cross-border lending by banks had suffered its biggest decline for a decade, French President Nicolas Sarkozy announced a sovereign wealth fund to protect strategically important firms while Britain's government leant on bank bosses to start loosening the purse strings. After the Dow Jones Industrial Average in New York lost 5.7 percent, all Asian markets saw serious losses on Thursday. Tokyo's Nikkei index fell 2.46 percent, Australia closed down off 4.4 percent and Hong Kong 3.6 percent. "The market is just disgraceful," said Ric Klusman, a dealer at Aequs Securities in Sydney. "There is no light at the end of the tunnel yet." In Europe, London lost 1.78 percent in late morning trade, Paris slid 3.11 percent and Frankfurt was down 2.91 percent near the half-way stage. The fresh falls came despite an announcement of further measures designed to restore confidence in the finance sector and among consumers. Japan's central bank said it had injected 600 billion yen (6.2 billion dollars) into the short-term money market while the International Monetary Fund moved to bail out Pakistan, which could need as much as 15 billion dollars to help pay mounting foreign debt. Governments around the world have unveiled packages over the last month totalling more than three trillion dollars, including loan guarantees and cash injections, to restore confidence to the financial system and reverse a sharp slowdown in lending. The scale of the slowdown was illustrated by figures from the Bank for International Settlements, the world's biggest central banking body, which showed cross-border lending by banks fell 1.1 trillion dollars in the second quarter of 2008. Banks were also hit by one trillion dollars' worth of withdrawals, particularly by clients in the United States, Britain and Switzerland. Sarkozy said the events of recent weeks had discredited free-market ideology and showed that economies needed strong state intervention to succeed. "The ideology of the dictatorship of the market ... is dead," he said, in a speech in which he announced that France would set up a sovereign wealth fund to "intervene massively" in companies of national strategic importance. The creation of the fund would not increase public debt, he insisted, since the state would hold shares in the firms concerned and would be able to sell them later at a profit, once the financial crisis has passed. His comments came as the state statistics agency said that industrial confidence had fallen to the lowest level in France since 1993. In Britain, the finance minister was meeting the heads of major banks to urge them to relax their lending conditions for small firms. Chancellor of the Exchequer Alistair Darling and Business Secretary Peter Mandelson were expected to tell bank chiefs that they had to help small firms through the looming recession. Major banks RBS, HBOS and Lloyds TSB were all helped by the government's 37-billion-pound (47-million-euro, 60-million-dollar) bailout this month. Sweden's central bank meanwhile tried to encourage consumer confidence by slashing its key interest rate by half a percentage point to 3.75 percent and said it planned to make further cuts within six months. The ongoing financial crisis began with the emergence of problems on the US housing loan market last year. Defaults on so-called subprime mortgage loans set off a chain reaction of problems for banks and other institutions across the globe at a time when the global economy was already slowing. The crisis has already brought down the venerable US investment bank Lehman Brothers but bank chief and government leaders have expressed tentative hopes that recent bailout measures will ensure the worst is over.