A broad probe into the health of Europe's financial sector found virtually every major bank in the region fit to withstand severe economic shocks and declared only a handful of smaller institutions at risk.
The long-awaited tests were aimed at assuaging fears of a European banking crisis. The Europeans followed in the footsteps of US officials who last year conducted probes into the health of American banks, forcing almost half of those examined to beef up reserves.
The results are comforting on the surface, providing the first evidence that Europe's banking sector may be stronger than some had feared. But skeptics said the clean bill of health given to so many of the region's banks — only seven out of 91 banks tested were told to increase reserves — raised serious questions about whether the tests had been strict enough. While the results may not panic investors, they may not reassure them, either. Traders showed their early skepticism by selling off the euro in late trading in New York on Friday when the results were published after the close of markets in Europe.