Fears over the global financial markets today began to spread from banks into other areas of the industry after MF Global, the futures and options broker, saw its shares slump 78 per cent and its former parent, Man Group, reported a 10.1 per cent fall.

Shares in MF Global, which was spun off from Man Group last year, appeared to have been infected by overall market panic that all areas of the financial community could face significant funding problems.

At the weekend, Bear Stearns was acquired for just $240 million (£120 million) by JP Morgan Chase after investors started a run on the US investment bank late last week, adding to already heightened concern about the state of the global financial system.

MF's countered today's speculation that customers were pulling funds by stating it has no exposure to sub-prime mortgage-backed assets, that it had $1.4 billion in committed, undrawn facilities and that it does not count billionaire investor, Joe Lewis, as a shareholder.

Last year, the secretive 71-year old Mr Lewis acquired a large stake in Bear Stearns and is now thought to be out of pocket to the tune of $800 million after the investment bank's share price plummeted.

In London, the listed hedge fund, Man Group, saw its shares lose 58p to 470p as the FTSE 100 index of leading companies closed down 217.3 points at 5,414.4.

Frederick Cannon, an analyst at Keefe Bruyette & Woods, said: "In part due to the unregulated nature of hedge funds and other market participants, there is a lack of transparency of the balance sheet strength of many financial institutions.

“As a result, more crises can be expected.”

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