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European shares sank 5.6 percent by midday on Monday, threatening their worst one-day fall since the attacks of September 2001 as investors rattled by the spectre of a U.S. recession dumped stock across the board. The U.S. stock market is closed for a holiday. British Prime Minister Gordon Brown, who is touring India, proposed turning the IMF into an independent watchdog that would form the heart of a global warning system against financial turbulence. European banking analyst at Bear Stern, Chris Wheeler, said it may be a case of shutting the stable door after the horse has bolted. SOUNDBITE: European Banking Analyst, Bear Stern, Chris Wheeler, saying (English): "Well I think we're always thinking of ways of dealing with banking crises after the event. I'm afraid I'm old enough to remember when the American debt crisis broke in 1984 and everybody felt they should have spotted the fact that sovereign nations while they may not go bust, could actually stop paying interest which would have an impact on banks. And there was a lot of navel-gazing as to whether we should spotted that before, and of course we should have but hindsight is a wonderful thing. I just think that people are scrabbling around looking for lots of ways and suggesting we could avoid the problem we're in at the moment." The credit crunch claimed a high-profile casualty in Britain when mortgage lender Northern Rock suffered the country's first bank run in over a century. Northern Rock borrowed about 26 billion pounds from the Bank of England. Britain has now set a two-week deadline for a private sector rescue bid and confirmed plans to convert its billions of pounds in loans to the stricken bank into bonds in a bid to smooth the deal. The sub-prime bill is mounting in Germany too. Commerzbank told Reuters that it would have to make fourth-quarter write-downs on its sub-prime linked investments with the possibility of more to follow if markets don't improve. The country's second biggest listed bank wrote down $427 million dollars in the third quarter. The news came as problems at WestLB kept Germany centre stage as one of the countries worst affected by the credit crisis. Owners of the state lender rallied to shoulder what the bank said would be a $1.47 billion loss in 2007 and a write-down just as big. Looking at the markets across Europe, and there was a see of red. All the major indices were down. The UK's FTSE had its worst result since 9/11 and Germany's DAX was on track to take its biggest one-day fall since May 2006. The FTSEurofirst 300 was down almost 5 and a third percent in afternoon trade. Banks were the worst performers, with heavyweight energy stocks also taking big hits. The financial services sector is in panic mode after news from Germany and rumours that French Bank Societe Generale could announce write-downs after repeatedly saying they had no exposure to the troubled subprime mortgage market. Stefanie McIntyre, Reuters COMPANIES MENTIONED: SYMBOLS: