Investors may be worried about Russia generating a new phase of a worldwide financial crisis, but the threat to the world's financial system is not yet seen to be as serious as that posed by the Latin American debt crisis of the 1980s.

Mr Charles Dallara, managing director of the Institute of International Finance, a Washington-based think tank, said the current Russian crisis, with the turmoil in Asia, did not yet equal the threat to the world financial system posed by Latin America's debt crisis of the 1980s.

Many analysts now conclude that if the debt owed by Latin American governments to US, European, and to some Japanese banks in the 1980s had been recognised at its market value, many of the world's main banking institutions would have been bankrupted by that crisis.

But central banks and governments in the industrialised world acted to make sure the market value of the loans was not reflected in banks' balance sheets and the international banking system was able to ride out the crisis, until a longer-term solution to the problem was found in the form of the so-called Brady Plan in the late 1980s.

The current crisis offers nowhere near the same kind of risks to the world's banking system, because banks hold nowhere near the same volumes of debt, in general, and because they are mostly better capitalised.

The international holders of the debt in Asia and Russia are much more widely dispersed, both for better the viability of big deposit taking institutions is not threatened and for worse the ability to co-ordinate a creditor response to a crisis becomes more difficult.

Mr Dallara points out the changes in the global financial markets since the 1980s means that losses to financial institutions are recognised immediately. This means financial problems are transmitted much more quickly from one financial system to another than in the 1980s.

For instance, large international investors, such as hedge funds, may well seek to preserve liquidity needed in part for potential withdrawals in the face of losses in Russia by selling financial instruments in economies unconnected to Russia in any significant sense, such as Brazil.

In other words, the disease may be less virulent than in the 1980s but it is far more contagious. Another difference with the 1980s is the scope for correction of the US financial markets. The Latin American debt crisis followed a battering taken in US financial markets from the high interest rates of the early 1980s.

In the late 1990s, this contagion is taking place at a time when the US stock market, in the view of many, is ripe for correction.

In a more narrow sense, creditors have criticised the Russian government's unilateral moves towards its foreign debt restructuring, and contrasted them unfavourably with the way the South Koreans dealt co-operatively with their debt problem in the early 1980s.

This unilateral approach, which has its parallels in efforts by countries such as Brazil in the mid-1980s to resolve their debt questions unilaterally, will, creditors say, make it harder for the Russian government, lead by Prime Minister Victor Chernomyrdin, to secure future finance from the private sector.

But there are few parallels in recent history where a large debtor has set about restructuring its debts amid such political and economic turmoil.