Banks and ratings companies are sounding their loudest warnings yet that the euro area risks unraveling unless its guardians intensify efforts to beat the two-year sovereign debt crisis.

As European finance chiefs prepare to meet this week, and Italy seeks to raise as much as 8.8 billion euros ($11.7 billion) in bond sales, economists from Morgan Stanley, UBS AG, and Nomura International Plc say governments and the European Central Bank must step up their crisis response. Moody's Investors Service said today the "rapid escalation" of the crisis threatens all of the region's sovereign ratings.

"Skepticism has grown that euro-area policy makers can deal effectively with the key challenges they face," Pier Carlo Padoan, the chief economist at the Paris-based Organization for Economic Cooperation and Development, said today as he cut forecasts for European and global growth. Serious downside risks remain, linked to "loss of confidence in sovereign-debt markets and the monetary union itself."