World stocks fell and safe-haven bonds surged on Monday after fears of major losses in Citigroup rekindled concerns about the health of financial firms hit by the credit market turmoil.

The dollar fell against the yen and held near record lows against the euro. Commodity prices also slipped after last week's rally, weighing on emerging market assets. Oil prices edged further away from last week's record highs, while gold also came off last week's 28-year high.

Banking giant Citigroup's chairman and chief executive Charles Prince resigned on Sunday as the bank said it may write off $11 billion of subprime mortgage losses, on top of a $6.5 billion write-down last quarter.

Concerns about the banking sector, hit by the fallout in U.S. subprime mortgage loans, triggered a sell-off in risky assets including stocks and pushed up the cost of interbank borrowing sharply in August and September.

Citi's announcement renewed such fears, with uncertainty over how much other banks are exposed to the credit market compounding worries about the impact on global growth.

The fact that Citigroup could be announcing as much as $11 billion is reigniting all the fears from the subprime troubles, That hit Japanese stocks overnight and it's going to be the same here, said Edmund Shing, strategist at BNP Paribas in Paris.

MSCI main world equity index was down half a percent, edging away from last week's record high. The index is still up more than 13 percent since January.

The FTSEurofirst 300 index was down 0.5 percent, dragged lower by falls in banking shares.

The iTraxx Crossover index, mostly-widely watched indicator for European credit market sentiment, widened by 11.5 basis points to 356 bps. It was a blowout in this index which triggered credit concerns in August.

Two-month dollar deposit rates, indicated on Reuters system, hit a two-week high above 4.8 percent, 30 basis points above the Federal Reserve's benchmark interest rates. Two-month money covers the funding for the new year.

The dollar hit a one-week low of 114.27 yen and stood at $1.4465 per euro, near last week's record low.

The journey through the financial turmoil has... gone back to resembling a tunnel of fear, with new scary monsters jumping out of the dark at every corner, Unicredit said in a note to clients.

Emerging market stocks, as measured by MSCI, were down 1.4 percent, while emerging sovereign spreads were unchanged.

The December Bund future was up 14 ticks, after hitting a near two-week high earlier.

U.S. light crude was down more than 1 percent at $94.90 a barrel, having surged past $96 for the first time last week. Gold was down on the day, although it held above the $800 an ounce mark.