The carnage in the banking sector continued today when Wall Street giant Citigroup said it had slashed 11,000 jobs in the past three months.

That takes the job losses at the bank to 23,000 this year, a brutal sign of how much business has slumped.

The environment is such that Citi almost seemed to be boasting of the cuts, presenting them as a sign of its prudence.

Citigroup declined to say how many London bankers it has fired. It employs around 11,000 in the UK and more than 350,000 across the globe.

The bank made another loss in the third quarter of $2.8 billion (£1.6 billion), though the extent of the red ink washing through the bank means that this isn't regarded as a bad result.

Chief executive Vikram Pandit said: "I am very proud of my Citi colleagues for staying focused on our priorities and for their relentless commitment."

Citi's assets have tumbled in value by $50 billion in the past three months and by $308 billion in the past year, a combination of writedowns and write-offs for bad mortgages, bad derivatives, and bad bets on the stock market.

Its rival Merrill Lynch also had predictably bad news, making a loss for the quarter of $5 billion. Merrill has lost well over $50 billion in the credit crunch and has been forced into the arms of Bank of America.

Executives are tidying up the business in readiness for the merger, writing down assets and cutting debt.

Chief executive John Thain said: "We continue to reduce exposures and deleverage the balance sheet prior to the closing of the Bank of America deal."

Merrill has axed 3300 jobs in the past year, leaving it with 60,900 staff worldwide.

Meanwhile, shares fell again around the world this afternoon amid rising fears about the state of the global economy.

The FTSE 100 index was down 140.4, or 3.4%, at 3939.13 while across Europe the main bourses were off between 2% and 4%. Falls came from across the board, with insurers, retailers and mining stocks tumbling.

The main banks at the heart of the government bailout, Lloyds TSB, Royal Bank of Scotland and HBOS, managed to stave off share price losses, however, amid hopes the government would relax its stance on allowing them to pay dividends to shareholders.

RBS's improvement was partly fuelled by reports that private-equity group CVC Capital was in talks to take a controlling stake in the bank's insurance businesses.

The slide in Europe marked a continuation of the trend set by Asia early this morning, where Japan's Nikkei 225 fell more than 11%. That was the biggest one-day slide since the 1987 market crash.

Energy shares like BP, Shell and BG got the most value from the London index, taking their lead from the latest slump in the oil price.