Paris - Other industrial nations besides the United States should begin drawing up plans to shore up their financial sectors, the head of the International Monetary Fund, Dominique Strauss-Kahn, said in an article published Tuesday in the French daily Le Monde.

After praising the bailout measures proposed by the US government, Strauss-Kahn wrote: "To stave off all eventualities, other industrial nations should also prepare plans of action, notably because of the difficulty of dealing with the problem of financial institutions that work in several countries."

If such plans are formulated, Strauss-Kahn said, "the financial systems, which grew far in excess compared to the real economy, could be stabilized at a more reasonable level."

However, European leaders have so far failed to see the need to develop the sort of drastic bailout measures formulated by the Americans.

Although finance ministers and central bankers from the Group of Seven (G-7) leading industrialized nations on Monday pledged to take action to help stabilize the global economy, little agreement has been found among the individual countries as to what action to take.

On Monday, Germany said that it had no plans to join in the massive US bailout, while French Finance Minister Christine Lagarde said she had "decided to take no other measure" beyond banning short- selling practices.

Because of their large public debts, European governments have less flexibility - and funds - to deal with the crisis. In addition, European leaders and bankers seem to be convinced that the fallout from the American financial turmoil will be limited.

"We have had no request for help of any sort from any French bank," Lagarde said.

But investors appeared to be losing confidence in the American rescue plan, with stock markets in Asia and Europe falling back on Tuesday in the wake of Monday's Wall Street sell-off.

The Paris Bourse's benchmark CAC 40 was down 2 per cent in mid- afternoon trading, at 4,139.13, with banking shares among the day's biggest decliners.

London's FTSE 100 fell by 2.56 per cent, to 5,102.45, while the DAX in Frankfurt slipped 0.78 per cent, to 6,060.21.

Overnight, stock markets in Australia, India and Hong Kong all registered drops of over 2 per cent. (dpa)