Seven European banks failed the European Union test

European Union says 7 out of 91 European banks are not strong enough to face another recession

The tests were tough according to European Union and they hope that the results will restore the investor's confidence. Many analysts believe that these test may no matter much since the European economy is fast improving.

Out of the seven banks five were the small Spanish lenders, but their recapitalization is likely to speed a restructuring of a troubled sector. According to the bank of Spain they need a total of 1.8 billion euros to restore. Among these five banks are: Diada, Unnim, Espiga, Banca Civica, and Cajasur.

Even though the banks in Germany and Greece were considered to be weak but contrary to the popular belief only one bank from each nation failed the European Union bank test. The German lender Hypo Real Estate and ATE Bank of Greece failed to reach the European Union test.

The Committee of European Bank Supervisors (CEBS), with a staff of 25 members located in an office at London that conducted the said that it was more sever than the US test. Europe test if 91 banks will be strong enough to face another national recession or not.

After the test results many analysts believe that the banking system in Europe is good and that they can withstand government debt crisis and a the deepest recession since World War 2.