The Panic of ’89 by Paul Erdman (Doubleday: $17.95; 336 pp.)

What if the world financial system, that mighty tower that occasionally creaks in the wind, came tumbling down? It’s a frightening thought. And--let’s be honest--an idea that’s fun to contemplate.

The fun possibilities of calamity long ago occurred to Paul Erdman, the former international banker and author of the best-selling “The Crash of ‘79,” who has now spun a second romance of global mayhem, “The Panic of ’89.” Erdman’s target reader, he says, is the businessman who has spent the day poring over balance sheets and now, collapsed in an airline seat, has just enough energy to pick up a novel. If it’s not too demanding.

Erdman knows how to arouse this weary imagination. “Panic of ‘89” is wildly fantastic, yet a fantasy extrapolated from real economic news that’s pretty incredible, too. Latin American leaders, mutinous under their multibillion-dollar debts, scheme with Shiite terrorists, Red Army Factioneers and thin-lipped Swiss bankers to set off a panic that will empty American bank vaults and enrich the long-suffering victims of American economic imperialism.

Their principal adversary is our hero, a 6-foot-4-inch Teutonic James Bond of the Bourse. Paul Mayer, a former director of the International Monetary Fund, is a combination of Paul Volcker and Henry Kissinger, and obviously a man whom Erdman thinks is our reader’s ego-ideal.

The man’s so smart that the chairman of the Federal Reserve Board and the chief executive of Bank of America each beg him to become their personal advisers. Wouldn’t that be some kind of conflict of interest? Evidently not, for Mayer accepts both offers.

The folks at Bank of America, who have probably read quite enough about their institution’s recent difficulties, should prepare for another bout of indigestion. In Erdman’s yarn, B of A succumbs to a takeover assault in 1987, then confronts a $2-billion write-off that threatens to make it the first falling domino in the collapse of the U.S. financial system.

Bank of America isn’t the only California financial company to take its knocks from the author, who now lives in the wine country north of San Francisco. The cantankerous New Englander who is comptroller of the currency, still chafing at the problems of Financial Corp. of America and Crocker Bank, grouses that Californians run their banks and savings and loans “like gambling casinos.”

Erdman was a bit wide of the mark with his last disaster potboiler, the “Crash of ‘79,” in which he predicted fevered inflation would drive steak prices up to $16 a pound. But he knows something about international finance, and the uninitiated will be grateful for his clear explanations of such subjects as the Soviet export trade, banks’ off-balance-sheet financing and the way Switzerland’s attractions for bank depositors nourish its national economy.

Erdman uses the names of real characters and institutions to add credibility. But this technique has some curious effects. “The Panic of ‘89” must have gone to press just before the Iran- contras caldron bubbled over, for Ronald Reagan is described as the luckiest President ever, “like a quarterback who had never been sacked in eight years in the NFL.”

And Bank of America is stalked by one Karl Boesky, a Great White of Wall Street who has apparently not received any unexpected visits from Securities and Exchange Commission investigators.

Erdman is tough on Latin American dictators, Arabs and California bankers, but he reserves a special opprobrium for the Swiss, who imprisoned him for 10 months after the failure of a bank he founded in that country. The villainous Dr. Ulrich Haber, chairman of the Swiss National Bank, is a man who believes his life’s work is keeping the money of the world’s rich “safe from the grasp of the rabble.”

He’s not the only cardboard bad guy. When Viktor Chebrikov, head of the KGB, hears that U.S. markets are crashing, he pulls a bottle of Stolichnaya from his bottom drawer and toasts to his empty office “The decline and fall of the United States!” If this caricature would bring a blush to the cheeks of TV-movie scriptwriters, the book’s rise on the best-seller lists suggests the nation’s tired businessmen are eating it up.