What remains to be seen is how investors will react to the news today, once they have worked through the mass of data disclosed after the European markets closed.
Nearly 200 pages alone was released by the European umbrella body, the Committee of European Banking Supervisors, plus thousands more from national regulators, banking associations and the 91 banks that were subjected to the tests.
The mechanics of the tests were horribly complicated, but essentially break down into a macroeconomic stress of banks’ loans and investments (via projected falls in GDP and projected rises in unemployment and interest rates).
This is coupled with a “sovereign stress,” involving a loss of market confidence, though not a sovereign default. European regulators said they did not model for a sovereign default because such as scenario was “highly implausible.”
After widespread scepticism about the tests, and increasing talk of a whitewash, the reality of how rigorous the tests really are is probably more subtle - parts of them were tough, other parts, surprisingly lenient.
Ultimately seven banks fell short of the 6 per cent tier one capital ratio passmark, with a combined capital shortfall of ¥3.5bn ($4.5bn).
The market is likely to be most sceptical about the terms of the stress imposed on European government debt - which included discounts, or “haircuts,” of 23 per cent for Greek sovereign debt, 14 per cent for Portuguese, 12 per cent for Spanish and 10 per cent for UK debt.
Investors see those haircuts as too benign, especially in the light of the more dramatic plunge in the value of Greek debt in the early part of the year.
They also criticise the notion of having applied any kind of haircut - in the event, nearly 5 per cent - on German bunds, seen as the benchmark for sovereign security in Europe.
The planned release by individual banks of the totality of their sovereign holdings should do something to offset scepticism, as the transparency will allow analysts to construct their own tougher stress scenarios.
In other areas, however, regulators insist they have been stringent. Equity portfolios are hit with a combined two-year 36 per cent discount.
Modelled declines in GDP look relatively harsh, too, at an average underperformance versus ECB forecasts of 3 percentage points.
For Germany, whose export-based economy harbours the biggest risk to GDP, the figure is 3.3 points. The short-term interest rate hike - of 1.25 percentage points sustained until the end of 2011 is also unprecedented, regulators said.
Overall, they said the combined scenario had a 5 per cent - or one in 20 year likelihood - of happening, far tougher than the 15 per cent implied by the US blueprint for the EU tests, drawn up last year.
This macro-stress is applied to banks’ existing “probability of default” models on their loan portfolios.
Although Spain’s cajas were, as expected, the worst hit by the stress test, the country’s biggest banks emerged in fine fettle. Santander, the eurozone’s biggest bank by market value, also emerged as one of the most solvent of Spain’s listed lenders, maintaining a ratio of 10 per cent through the stress scenario.
Spain’s other main listed banks - BBVA and Banco Popular - were also given a clean bill of health, despite earlier doubts about the latter.
The worst performer was Banco Pastor, a small lender which scraped through with a 6 per cent Tier 1 ratio after assuming the worst case scenario.
The Bank of Spain said in a statement that the results showed that the country’s financial system was “solid.”
In Greece, state-owned Agricultural Bank of Greece (ATEbank) was the only one out of six Greek lenders to fail the stress test, with tier one capital set to fall to 3.46 per cent by the end of 2011 under the “adverse” scenario, including add-on sovereign debt stress.
ATEbank had already been planning to seek up to ¥1.5bn in fresh capital from a ¥10bn financial stability fund set up as part of Greece’s ¥110bn bail-out by the European Union and the International Monetary Fund.
A private Greek lender, Piraeus Bank, last week made an unsolicited offer to buy the state’s 77 per cent stake.
George Papaconstantinou, the finance minister, repeated earlier calls for consolidation.
In Germany 13 of 14 banks tested officially passed.
As expected, Hypo Real Estate, the troubled property lender, failed, saying it would have a tier 1 capital ration of 4.7 per cent under the most stressed scenario.
HRE - nationalised by the German government last year - said the outcome had limited relevance, given its already-stated need for more capital and its plan shortly to spin off most of its assets into a “bad bank” to run down over time.
Germany’s seven largest Landesbanken - regionally owned public-sector banks financed predominantly on wholesale markets - came through the test in spite of concern over their weak capital ratios following some disastrous investments in toxic securities.
NordLB, one of the more stable of the Landesbanken and which has not needed state aid so far, had the lowest tier one ratio - 6.2 per cent - under the most stressed scenario.
Jochen Sanio, head of Bafin, Germany’s bank supervisor, said: “The results of this test should provide all the confidence necessary. It is a very serious test.”
All four French banks in the tests - BNP, Société Générale, Crédit Agricole and BPCE - passed easily. But they had high levels of sovereign debt exposure - a total of ¥48.2bn of gross exposure to Italian sovereign debt, of which almost half was held by BNP Paribas, which owns BNL, the Italian bank.
Of ¥23.2bn of gross exposure to Italian sovereign debt, BNP had ¥1.4bn in its trading book.
Crédit Agricole, which also has stakes in Italian banks, had ¥12.3bn of gross exposure to Italian sovereign debt, of which ¥8.8bn is in its trading book.
In Italy, where all banks passed, Guseppe Mussari, president of the Italian banking association, said: “The results of the stress tests demonstrate that Italian banks are solid and ready for the future.”
Switzerland said its big banks, Credit Suisse and UBS, had passed a parallel stress test exercise, though it gave no details.
Overall, analysts see the exercise as a largely wasted opportunity for much of the eurozone.
“This will go down as a test that is disappointing for the core of Europe - particularly France and Germany,” one analyst said.
“The quality of capital in the banks is not being tested.”
* Reporting by Patrick Jenkins, James Wilson, Mark Mulligan, Kerin Hope, Guy Dinmore, Scheharazade Daneshkhu and Chris Bryant.