The concept of leveraging art has existed for years. Private banks and many corporate giants such as Deutsche Bank and UBS have long offered lending services through their art advisory wings in an effort to lure business from wealthy clients. Part of art financing's success can be attributed to its appeal. It has managed to make a traditionally illiquid asset a maneuverable cog in an investor's portfolio.

Banks reigning in lending parallels another trend in the art market: the growing number of people rushing to cash out their collections. Katharina von Reden, an art adviser with clients in New York and Berlin, says she fielded at least a dozen calls in recent weeks from worried clients considering selling parts of their collection as the stock market began to tank. Most surprising, she says, were the number of veteran collectors inquiring about selling.

"They aren't panicking just yet, but there's a real concern out there about which way the art market will turn," she says. "You have people who are no longer comfortable with riding out a financial storm."

Collectors who bought at the height of the market are also worried that they may not get stellar returns.

Last month Sotheby's withdrew a Picasso Cubist painting that was set to be auctioned in its November Impressionist and Modern art sale, which began Monday. Arlequin (1909), which the auction house valued at more than $30 million, was to be one of the most expensive works in a high-profile sale to kick off the fall art season. Sotheby's released a statement saying the owner decided to withdraw the painting "for private reasons." But speculation swirled that it was pulled because of fears about tanking art prices.

There are other signs that the global financial crisis is dampening the market for fine art. In London last month, sales of contemporary art failed to live up to expectations. Sales missed minimum forecasts by up to $40 million, though pre-sale estimates were largely established before the financial crisis exploded. Millions of dollars of art went unsold, with many works going for well below their estimates. The low point of the London sales came when a rare painting of the artist Francis Bacon by Lucian Freud surprised observers by selling for more than $2 million less than expected.

Art-world observers are paying close attention this week to New York impressionist, modern and contemporary art sales at Sotheby's, Christie's, and Phillips de Pury. "There's very little doubt that the New York sales will be under very intense scrutiny," says Kamel Mennour, a Paris-based gallery owner and art adviser who will be in New York for the sales. "People want to see if the financial crisis will severely affect prices."

More than $1 billion worth of fine art is set to go under the hammer in New York. One person who will not be bidding is Tim Williamson. After failing to secure bank financing, he says he has decided to skip this season's sales. "I'm not sure it's time to buy just yet," he says. "I'm taking a more wait-and-see approach this season."