With panic reigning in the financial markets, BCA Research predicts that the current crisis is likely going to require co-ordinated rate cuts and a partial nationalization of the global banking system.

“The intensifying credit crunch and recent evidence of knock-on effects to the global economy appear to be shattering any remaining confidence among market participants,” BCA observes in a research note. “Investors are bailing out of all risk assets at any cost, fleeing into safe havens such as cash and government securities.”

The firm notes that widespread fears of global bank failures persist, despite the fact that a bailout package was approved in the U.S. last week. Nevertheless, several markets have experienced bank runs, and financial institutions aren’t lending to one another, it adds.

As a result, BCA concludes that, “It appears increasingly likely that the end point will be coordinated central bank easing and at least a partial nationalization of the banking system in the major countries.”