WorldCom's alleged $3.8bn (€3.85bn) accounting irregularities will increase the pressure on a large group of banks that have lent the struggling US company money.

WorldCom's discovery of misstated profits came as it was finalising a multi-billion dollar refinancing package with several banks, in what would be the latest in a long line of bond and loan transactions that have attracted many of the biggest debt houses. Most investment banks have already reported spiralling loan loss provisions over the last few quarters and the WorldCom scandal will increase their misery.