The prospect of a euro zone downgrade by Standard & Poor's adds to bank refinancing strains at a time when euro zone banks are struggling to fund themselves, analysts and fund managers said on Tuesday.

In an unprecedented step, the agency said it may downgrade 15 euro zone countries including Germany.

Its warning comes ahead of a crucial Franco-German initiative to enforce budget discipline across the 17-member zone through EU treaty changes.

If S&P downgrades it will be another thorn in the side of banks and their ability to raise unsecured funding, Mediobanca analyst Chris Wheeler said.

For now the threat of a downgrade remains a warning shot to European leaders to take bold steps for resolving the crisis at a summit on Friday, Wheeler said.

S&P said ratings could be lowered by one notch for Austria, Belgium, Finland, Germany, the Netherlands and Luxembourg, and by up to two notches for the remaining nine placed under review, including currently AAA-rated France.

Top-rated German and French bonds underperformed peripheral debt after the warning, which came a day after their leaders -- Angela Merkel and Nicolas Sarkozy -- agreed to impose budget discipline across the euro zone through treaty changes. The proposals will be discussed on Friday.

European stocks, bond futures, and the euro were sent reeling by the shock warning, halting a rally in global equities that began last week. The MSCI world equity index fell 0.6 percent.

Euro zone banks and German banks in particular have benefited from Germany's triple-A rating. Book gains on German bunds have helped to offset writedowns on sovereign debt of Greece, Portugal, Italy, Spain and Ireland, analysts said.

Now German banks face pressure on two fronts. Firstly refinancing costs will likely rise and book gains from German Bunds will probably shrink. This could lead to higher capital requirements for German banks, said Oliver Flade, head of financial sector research at Allianz Global Investors.

It remains to be seen, however, whether a downgrade will happen, Flade added.

On Friday euro zone leaders are set to discuss automatic penalties for states that fail to keep deficits under control, and an early launch of a permanent bailout fund for euro states in distress.

Last week key euro-priced bank-to-bank lending rates fell after joint central bank action to cut the cost of dollar funding and a firming view that the ECB will cut interest rates next week.

(Reporting By Kathrin Jones and Edward Taylor, Editing by Mark Potter)