Japanese Prime Minister Taro Aso said Thursday the U.S. bank bailout was insufficient to quell investors' fears and the lack of confidence is contributing to the renewed plunge in global stock markets.

Aso made his comments as Japan's key stock index plummeted nearly 10 percent in early trading Thursday following another dive on Wall Street amid growing global recession fears. The index later fell even lower, closing down 1,089.02 points, or 11.4 percent, to 8,458.45, the biggest one-day percentage drop since the market crash of October 1987.

In recent years, as Wall Street boomed, Americans often dismissed Europe as a place for languorous meals and vacations, not economic innovation.

London has remained a financial hub, of course, but it was often treated dismissively — as a flashy aberration pumped up by petrodollars from Russia and the Gulf, an exception to the otherwise somnolent Continent.

However, this kind of thinking is now under challenge, because during the last 10 days Europeans have proved more nimble than Americans at getting to the root of the global financial crisis, whatever they may have lacked as innovators.

After US's initially dithering, Europe’s leaders came up with a financial bailout plan that has now set the pace for Washington, not the other way around, as had been customary for decades.

Then the Treasury Department decided to depart from its own initial bailout plan — the one approved by Congress earlier this month — and invest up to $250 billion directly in the nation’s banks. The nuts and bolts of that approach had been laid out days earlier by European leaders as they tried to save their own financial system.

This weekend, that outcome left Gordon Brown, the British prime minister, and Nicolas Sarkozy, the French president, in something of a commanding position to claim the title of wise men of the world and not just Europe. They are now speaking of creating a Bretton Woods agreement for the 21st century, while the leaders of the country that fathered the postwar financial system worked out at Bretton Woods, N.H., prefer to stay away from such big-picture talk.

Mr. Sarkozy, who was to meet this weekend with President Bush at Camp David, also told European leaders who gathered in Paris recently that he hoped “literally to rebuild the foundations of the financial systems.” People are summing up the week this way: “When it came to crisis-response mode, the Europeans, especially the British, did take the lead and the U.S. changed course.”

In London, where Britain’s willingness to follow the United States into Iraq five years ago still evokes outrage, officials have been especially quick to point out they didn’t follow Washington’s lead this time. “There’s no doubt that it was a British plan that was copied by the U.S.,” said Leon Brittan, who served as Home Secretary under Margaret Thatcher and was a top official at the European Commission. “It shows that the American conception of Europe as an economic basket case is outmoded and wrong.”

“Europe showed the capacity to respond to a crisis more quickly than the U.S.,” he added. “The U.S. went through agonies to come up with a plan.”

In total France and Germany, Switzerland, Spain and Britain are together anteing up more than $1 trillion to rescue their own financial institutions challenges any assertions that European bankers were any smarter or more prudent than their American counterparts. They have also put more than US into their bailout than US has done. that may be why Far East thinks US has not done enough.