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The trip comes as a surprise since Geithner returned only on Saturday from a meeting of Group of Seven finance ministers in Marseilles, France, where he said Europe's strongest economies must offer "unequivocal" backing to the weakest.

Geithner is expected to attend the euro zone meeting on Friday and then return to Washington. The Treasury said on Monday only that he will discuss efforts to boost global recovery and cooperate on financial regulation, but U.S. attention is focused on risks posed by potential European debt contagion.

The danger that a Greek debt default could roil bigger European economies was underlined on Monday as heavily exposed French banks' shares plunged and investor confidence in the euro zone's ability to surmount a sovereign debt crisis ebbed.

Underscoring concerns by the United States about the global economic dangers from Europe's debt troubles, the Treasury Department said Geithner would meet with International Monetary Fund chief Christine Lagarde on Tuesday.

Geithner's trip to Europe marks the first time a U.S. Treasury secretary will attend a meeting of euro zone finance ministers. But it is not the first time he has tried to push Europe into acting more decisively to cope with its debts.

In March, he made a quick one-day trip to Germany just days ahead of a Europe Union summit to meet his counterpart, Wolfgang Schaeuble, and to urge European countries to step up their efforts to handle the crisis.

He held a one-on-one session with Schaeuble again in Marseilles on Friday, but neither side would talk about what was discussed in that session.

On Monday, shares in Societe Generale, BNP Paribas and Credit Agricole slumped more than 10 percent amid expectations of an imminent downgrade by credit ratings agency Moody's due to their exposure to Greek bonds.

The surprise resignation of European Central Bank Chief Economist Juergen Stark on Friday and weekend comments by German politicians suggesting Athens may have to default and be "suspended" from the euro zone drove the euro to a 10-year low against the yen and a seven-month low against the dollar, though it later recovered some ground.

"Europe is not just lurching from one crisis to another. It is lurching into a new one before the previous one is solved," said Makoto Noji, senior strategist at SMBC Nikko Securities.

The storm on Monday forced SocGen, the hardest-hit French lender in recent weeks, to announce further drastic measures it denied only last week were under consideration, speeding up asset disposals and deepening cost cuts to free up 4 billion euros in fresh capital.

The bank's market value has shrunk from 110 billion euros in mid-2007 to just 12 billion on Monday. The bank's chief executive said there were no discussions regarding possible state intervention.

Finance Minister Francois Baroin said French banks were solid enough to withstand any crisis in Greece and Bank of France Governor Christian Noyer rushed out a statement saying French banks were not at risk.

"There is no crisis for the banks because those that are currently being hit on the markets have all the necessary means to offer solutions," Baroin told reporters, adding that G7 central banks were committed to providing "as much liquidity as banks need.

French banks and insurers are not only the biggest foreign holders of Greek government bonds, both directly and through Greek subsidiaries, but are also major creditors of Italy, which is increasingly in the markets' firing line.

Moody's is expected to downgrade Italy's Aa2 sovereign rating this week, Richard Kelly, head of European rates and FX research at TD Securities said, noting that both Fitch and Standard & Poor's already had lower ratings for Rome.

The Financial Times reported on its website on Monday that Italy has asked China to make "significant" purchases of Italian debt. The chairman of the China Investment Corp headed a delegation to Rome last week following a visit two weeks ago by Italian officials to Beijing to meet CIC and State Administration of Foreign Exchange officials, the report said.

OMINOUS START

It was an ominous start to a high-stakes week for the euro zone.

The ECB disclosed that it bought another 14 billion euros in euro zone government bonds last week, the biggest amount in three weeks, under a controversial policy to hold down troubled peripheral countries' borrowing costs.

The central bank holds a total of 143 billion euros in Italian, Spanish, Greek, Portuguese and Irish bonds under its securities market program, which drove Stark -- a traditional German central banking hawk -- to resign.

Greece resumed suspended talks with global lenders on a vital 8 billion euro aid installment after announcing a new real estate tax on Sunday to try to plug yet another gap in its 2011 budget deficit. Athens has only a few weeks' cash left.

EU finance ministers are scrambling to settle disputes over a second Greek bailout, including a spat over Finnish demands for collateral, in time for Friday's meeting in Poland.

The rescue package has been put in doubt by Greece's repeated missing of fiscal targets agreed with the EU and the International Monetary Fund, plus uncertainty over the scale of private sector participation in a bond swap and debt rollover.

Germany tried to douse the market impact of a string of weekend comments and media leaks suggesting Berlin is now assuming that Greece will default and working to seclude Athens from the rest of the euro zone.

Vice-Chancellor Philipp Roesler, who is economics minister and leader of Berlin's increasingly euroskeptic junior coalition party, the Free Democrats, said there could no longer be any taboos to stabilize the euro.

"That includes, if necessary, an orderly bankruptcy of Greece, if the required instruments are available," he wrote in an article in Die Welt newspaper.

However, an economics ministry spokesman said on Monday no such instruments were currently available, and a government spokesman insisted there was strong agreement between Roesler and Chancellor Angela Merkel on the euro zone debt crisis.

"We want to stabilize the whole euro zone with all member states," government spokesman Steffen Seibert said.

Asked about talk of a suspension, expulsion or voluntary departure of Greece from the euro zone, he said: "The legal position anyway stands in the way of such steps."

Seibert added that if Athens did not meet its fiscal commitments to the EU, ECB and IMF, that would automatically lead to nonpayment of the next tranche of aid.

Greece's deputy finance minister said the government had cash to operate until next month, highlighting the urgent need for the next emergency loan.

Greek power workers threatened to sabotage the new property tax announced by the government on Sunday as a last-ditch effort to please foreign creditors. Authorities plan to collect the tax through electricity bills to ensure swift payment.

(Additional reporting by Anirban Nag in London, Elena Berton and Jean-Baptiste Vey in Paris, Harry Papachristou in Athens and Brian Rohan in Berlin; Writing by Paul Taylor and Glenn Somerville; Editing by Dan Grebler)

The program -- known as New BAC after the company's stock symbol -- is focusing on consumer banking and the bank's systems architecture for now, he said. The second phase will focus on institutional client businesses such as corporate banking.

Bank of America built itself through acquisitions over decades and, according to analysts, has not properly integrated systems or closed unnecessary branches. The bank had 5,700 branches nationwide and 287,000 employees as of June 30.

Media reports on Friday said the bank was targeting 40,000 job cuts over the next three years as part of the cost-cutting program.

The bank is targeting an expense-to-revenue ratio to 55 percent and is cutting from roughly $73 billion in annual expenses.

Bank of America has about 50 senior employees reviewing some 150,000 ideas for cutting costs, Moynihan said. He disclosed details of the New BAC program at a Barclays Capital financial services conference.

Bank of America shares have lost nearly half their value this year amid rising fears the bank will need to sell more shares to boost its capital levels.

By many estimates, the bank will need to raise about $50 billion in coming years to meet new global capital requirements, a level the bank says it can reach through earnings and asset sales.

Investors fear mortgage settlements could boost the bank's capital requirements, and that any stock offering would further dilute shareholder equity. The bank's share count has risen from 4 billion in 2007, before the financial crisis peaked, to more than 10 billion this year.

The bank's share price decline was temporarily arrested in late August by a $5 billion investment from billionaire Warren Buffett, who purchased preferred stock and warrants to buy 700 million common shares over the next decade.

At first, news of the Buffett investment sent Bank of America shares soaring more than 20 percent, but they have since retreated to levels seen before the investment.

At the Barclays conference, Moynihan said the bank was not required by regulators to seek outside capital. He also said the Buffett deal was "absolutely the right thing" for the bank to do.

Bank of America were up 3 cents to $7.01 in morning trading.

(Reporting by Joe Rauch and Dan Wilchins; Editing by Lisa Von Ahn and John Wallace)

The resignation of Juergen Stark from the ECB throws into question policymakers' ability to deal with Europe's debt crisis, a problem that could engulf a world economy already teetering on the brink of recession.

Greece on Sunday slapped a new tax on real estate to plug a 2011 budget hole, please international lenders and secure a key new loan tranche as concerns mounted in Europe over its euro zone membership.

International Monetary Fund resources could prove to be sorely lacking if global financial conditions worsen and more countries turn to the global lender for financial rescues, IMF staff said in an internal document.

Verizon Communications (VZ.N) has dashed the hopes of Vodafone (VOD.L) investors by ruling out a return to a recurring dividend from the two companies' U.S. mobile phone joint venture, called Verizon Wireless, the Financial Times reported on Monday.

The U.S. Federal Reserve has quizzed Capital One Financial Corp (COF.N) to determine whether the proposed purchase of ING Groep NV's (ING.AS) U.S. online banking business would create a "too big to fail" institution, the Wall Street Journal said.

French group Technip (TECF.PA) is to buy U.S. underwater oil services specialist Global Industries (GLBL.O) for an agreed $937 million, to expand in the fast-growing underwater oil services sector.

U.S. health insurer WellPoint Inc (WLP.N) and computer giant IBM (IBM.N) agreed to commercially use IBM's Watson technology that could help physicians identify best treatment options.

Shareholders in Britain's Autonomy (AUTN.L) are likely to snap up Hewlett-Packard's (HPQ.N) fully priced offer on Monday, as the chances of a competing bid for the enterprise search software firm recede.

Amazon.com Inc (AMZN.O) is in talks with book publishers about launching a media library service similar to Netflix Inc (NFLX.O) for tablets and other digital books, The Wall Street Journal reported on Sunday.

The U.S. Treasury is weighing a proposal to eliminate some, but not all, of the taxes on overseas profits of U.S.-based companies, the Wall Street Journal reported on Saturday, citing two people familiar with the deliberations.

Resource-related stocks will be in focus as key base metals prices fell 1.2 to 2.0 percent and crude oil slipped 2.2. percent on growth concerns.

European shares dropped sharply on Monday, led by banking stocks on concerns that policy makers were not doing enough to come up with a permanent solution to the euro zone peripheral debt crisis as worries intensified that Greece could default. The FTSEurofirst 300 .FTEU3 index of top European shares was down 3.3 percent after dropping 2.6 percent on Friday.

Japan's Nikkei average .N225 fell more than 2 percent on Monday to a fresh 2-1/2 year closing low.

The Dow Jones industrial average .DJI dropped 303.68 points, or 2.69 percent, to 10,992.13 on Friday. The Standard & Poor's 500 Index .SPX dropped 31.67 points, or 2.67 percent, to 1,154.23. The Nasdaq Composite Index .IXIC dropped 61.15 points, or 2.42 percent, to 2,467.99.

(Reporting by Atul Prakash; Editing by Jon Loades-Carter)

Oil and copper prices fell and the dollar gained broadly as worries about the euro zone's woes combined with fears about flagging world growth to ensure no let-up in the gloom that has gripped global markets for much of the past six weeks.

"People are quite nervous about Greece and other countries in the European area, so that is why investors are escaping to the dollar," said Tetsu Emori, a fund manager at Tokyo-based Astmax Co Ltd. "It's risk aversion."

Euro STOXX 50 index futures fell 2.7 percent, and DAX and CAC-40 futures also dropped more than 2 percent, while financial bookmakers called the FTSE 100 .FTSE to open down 1.4 percent.

German policymaker Juergen Stark's resignation from the ECB's board underscored the internal divisions over its bond-buying program -- one of the central bank's main weapons in fighting the debt crisis by forcing down yields of country's under pressure from the bond markets.

Japan's Nikkei .N225 ended down 2.3 percent to its lowest close since April 2009, while the MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS dropped 3 percent and U.S. index futures traded in Asia fell 1.3 percent.

"For the rest of the week, developments in euro zone debt problems and movements in the euro will likely set the direction of the market," said Yutaka Miura, a senior technical analyst at Mizuho Securities in Tokyo.

Wall Street stocks tumbled on Friday, when the Stark news broke, with the S&P 500 index .SPX falling 2.7 percent. .N

Data from fund tracker Lipper, a Thomson Reuters service, showed that a brief flirtation with stocks at the end of August has waned, with less than a net $600 million flowing into U.S. equity funds in the week ended September 7, compared with a net inflow of $6.3 billion in the previous week.

MSCI's All-Country World index .MIWD00000PUS is now 19 percent below its 2011 high set in May, not far from the 20 percent decline that is the rule-of-thumb definition of a bear market.

The fund flow picture for emerging Asian equity markets was mixed. Citigroup analysts said in a note that China and Indonesia had seen modest net inflows for the week to September 7. The biggest outflows were from regional funds and the cyclical markets of South Korea and Taiwan.

GREEK DEFAULT

Adding to the euro zone's difficulties, top French banks were bracing for credit rating downgrades on worries about their sovereign debt exposure, and senior German politicians in Chancellor Angela Merkel's center-right coalition began talking openly about a Greek default.

A growing number of policymakers, as well as market economists, are convinced it is only a matter of time before Greece, which keeps falling behind on its fiscal targets after two EU/IMF bailouts, will have to default.

"The outlook for Greece is almost completely unknown. Support for the country appears to be shaking. The market is starting to think the worst could happen," said Katsunori Kitakura, chief dealer at Chuo Mitsui Trust and Banking.

The euro fell to a six-month low around $1.3495 and later traded about $1.3530, after a sharp slide at the end of last week. Against the yen, the single currency fell as far as 104.27, its lowest since 2001.

Meanwhile, the dollar index .DXY, which tracks the greenback against a basket of major currencies, rose around 0.6 percent to its highest in more than six months.

U.S. crude oil fell by $1.59 to $85.64 a barrel and Brent crude eased $1.32 to $111.45. Copper was down 1 percent at $8,733.75 a tonne.

Both commodities are sensitive to expectations for global growth, and hence industrial demand.

Currencies of major commodity producers were, in turn, under pressure, with the Australian dollar falling more than 1 percent to a three-week low around $1.0330.

Gold, which has been striking a succession of records due to its traditional appeal as a safe haven at times of market volatility, fell 0.6 percent to around $1,846 an ounce as a stronger dollar made it more expensive for holders of other currencies.

Gold priced in euros, however, hit a record 1,373.92 an ounce.

Japanese government bonds tracked gains in U.S. Treasuries and German bunds as investors sought the perceived safest government debt, with the benchmark 10-year JGB yield falling below 1 percent.

(Additional reporting by Alejandro Barbajosa in Singapore, Ian Chua in Sydney and Hideyuki Sano in Tokyo; Editing by Kavita Chandran)