The World Economic Forum (WEF), pointing toward a major global financial risk, said that sovereign debt defaults should be taken very seriously in the prevailing global scenario.

The warning came at a time when the tremors of Dubai World's crisis are slowly fading away and leaders from top economies of the world are meeting at Davos in Switzerland in February.

Asking for the stern need of controlling debt level, WEF said that that it should be taken seriously lest the world could face "full-fledged sovereign debt crises". Daniel Hofmann, the Chief Economist of Zurich Financial Services, said, "In reaction to the financial crisis, many countries have put themselves at risk of overextending their fiscal positions and being burdened with extremely high levels of debt."

The WEF report claimed that major economies went out of the lines to bail out the financial system, pumping billions in the respective economies leading to build mountain of debt, very dangerous for the financial health of any economy.

The forum said in its report, "In response to the financial crisis, many countries are at risk of overextending unsustainable levels of debt, which, in turn, will exert strong upwards pressure on real interest rates."