The tumult in the European monetary zone is spreading concern among investors of a broader crisis in financial markets from Ireland to Spain.

The worry is that the worst case, a Greek debt default, would lead to damaging losses for European banks and spur a global panic, replaying the events of September 2008. Then, investors fled all but the safest government debt, unloading everything from corporate bonds to American and emerging country stocks. Global markets froze.

As European officials headed into a long weekend of critical talks, the European Union and the International Monetary Fund said they were confident of a deal to secure a vital 12 billion euros ($17 billion) in outside aid needed to stave off an imminent Greek default.

The comments, reflecting belated advances in negotiations that have been going on for weeks, were aimed at calming anxious financial markets. But so far, the deepening concerns are stopping short of transferring forcefully to the United States. For the time being at least, investors seem to believe enough shock absorbers have been built in to comfortably withstand any default by Greece or other highly debt-ridden nation.

The interest rate on US 10-year treasury bonds remains below 3%. In contrast, Spanish bond yields rose to an 11-year high of 5.74% as anxious investors fretted that it could be next in the firing line after Greece.

?US financial institutions are very cash-rich, so that means a liquidity crisis would have to be extraordinary before it affects them,? said Guy LeBas, the chief fixed-income strategist for Janney Montgomery Scott.

But the cost to investors of insuring their holdings of Greek government debt, to make sure they recoup their money in the event of a default, registered its single biggest one-day move. An investor now has to pay about $2 million annually to insure $10 million of Greek debt over five years, compared with about $50,000 on the same amount of US government debt, according to Markit.

Insurance rates on the debt of Irish and Portuguese governments ? as measured by rates in the market for credit-default swaps ? also climbed to record highs. In addition, Spain struggled to kindle investor interest on its bonds auction, selling 2.8 billion euros ($4 billion), missing its top target and with average yields creeping up again. The fear is that a Greek default could threaten the integrity of the euro zone, require European countries to bail out banks that lent heavily to Greece and other indebted countries, and spread panic across global markets.

The European Union?s top economic official, Olli Rehn, said he had reached a deal with the IMF to avoid a Greek default through at least the fall. But he warned politicians they must agree to new austerity measures or the programme would be worthless.

The mood in the markets was made more nervous when Michael Noonan, finance minister of Ireland, said on Wednesday that the Irish government was ready to impose losses on senior unsecured bondholders of Anglo Irish Bank and the Irish Nationwide Building Society if the European Central Bank agreed. That added to fears that countries beyond Greece might be involved in a broader restructuring.

The financial markets are watching nervously as the Greek government tries to push through austerity measures required to secure more international aid. Greece ?needs to better inform the markets as well as the Greek people that what?s being done is actually achieving results, which will help restore confidence,? said Claude Giorno, the senior economist for Greece at the Organization for Economic Cooperation and Development, based in Paris.

But the US, for the time being, appeared insulated from the problems, and American assets remain a destination for anxious global investors, with the dollar and Treasuries rising.

Still, two Deutsche Bank strategists, Jim Reid and Colin Tan, warned that this Greek crisis had echoes of the collapse of the Lehman Brothers investment bank in September 2008, an event that plunged the financial system into chaos and required the commitment of trillions of dollars in government support to stave off another Great Depression.

One ugly scene that some analysts are imagining involves a default by Greece leading to losses inflicted on banks in other European countries that own large amounts of Greek debt. The European Central Bank, too, is a big holder of debt, and analysts said in the event of a default it might need to be recapitalised, another blow to confidence. Those losses could then cascade to the US because the American and European banking systems are so interlocked, lending billions of dollars to each other every day.