The European debt crisis is unveiling similar signs of the subprime mortgage meltdown in the United States on 2007, with pressure and disruption in the financial system becoming more prominent as the problem gets worst by the day, according to a review by the Bank for International Settlements (BIS).

The BIS review said that the European Union's (EU) trillion dollar rescue package might be able to help but could only halt the eurozone crisis on short-term basis and could do little in preventing a possible sovereign debt contagion.

The bank said that while a collapse such as the Lehman Brothers' case may be remote for now, the decision of Standard & Poor's to downgrade Greek government debt to junk bond status in April this year did not bode well and "may have more in common with the start of the subprime crisis in July 2007 than the collapse of Lehman Brothers in September 2008."

The BIS pointed to heightened levels of risk in the LIBOR rate and pressure in global interbank and money markets as possible factors for the European debt crisis to replicate the subprime meltdown seen in 2007.

The bank also cited that slow growth and swelling fiscal problems resulted to much lower investor confidence, which subsequently rallied back to safe-haven assets to minimise their exposure risks.

The BIS report said that investors are now entertaining doubts on the strength of the worldwide growth as they see more worries on public debt in developed nations, jitters on the state of the financial markets, tightening controls in some emerging markets and the presence of political risks.

The bank said that it would be inevitable for market players to train their attention on the worsening financial market conditions instead of assessing and welcoming encouraging macroeconomic developments.

The BIS report also highlighted the exposures that European banks have incurred from the governments of Greece, Ireland, Portugal and Spain which totalled to $US254 billion and this still excludes the much bigger $US1.58 trillion loans by private individuals in those four countries.

The bank specifically identified French and German banks as being most exposed to loan risks from all four countries, with up to $US483 billion and $US465 billion worth of exposures respectively, and accounting for about 61 percent of all euro lenders.