Commercial banks have rejected calls for creditors to allow Greece to trade its existing bonds for those with extended repayment limits.

Reports from the Business Spectator said the Institute of International Finance (IIF) advised against this move since compelling private creditors to "write down their Greek bond holdings by more than 21 percent that was agreed upon in July will only cause a spiraling effect that will allow the crisis to spread to other parts of Europe."

This action is also expected to affect taxpayers adversely and wear down confidence in the euro currency.

The IIF revealed that the July agreement will most likely save Greece approximately 54 billion euros by 2014 and another 135 billion in 2020.

"The agreement is considered to be fair and has in fact imposed a heavy yoke on banking institutions and private investors during this chaotic times," declared Josef Ackermann, CEO of Germany's Deutsche Bank and outgoing chairman of IIF.

Most economic analysts say the savings are too insignificant to make the nation's enormous debts sustainable again.

Meanwhile, the U.S. and China warned of serious consequences such as recession if Euro Nations fail to act immediately on the debt crisis.

Key economic powers led by the U.S. and China urged the 17 members of the Euro zone to exert more efforts in preventing the debt crisis from falling out of control.

The huge financial troubles confronting most parts of Europe were one of the hot topics during the annual conference of lending institutions at the International Monetary Fund (IMF) in Washington D.C on Saturday.

The Washington Post reported U.S. Treasury Timothy F. Geithner conveyed to the IMF council that the protracted debt crisis is currently the gravest menace to the international economy and that failure to act on it will lead to "possible bank runs and spilling defaults."

"The European Central Bank must see to it that governments that are looking for real reforms can obtain loans at reasonable rates and that European banks have access to capital necessary for operations," he emphasized.

The International and Monetary Financial Committee revealed that members of the euro-zone have promised to work hard to ensure stability in financial markets.

Economic officials of China, whose country's growth depended on exports to the U.S. and the rest of Europe also expressed their apprehensions and said that the current crisis manifested the inadequacies of "Western democracy and culture."