Seven out of the 91 European banks have failed from the stress test being served to them by Committee of European Banking Supervisors (CEBS)

According to CBES, the seven banks that failed through the health checks, includes five Spanish banks, such as Espiga, Banca Civica, Diada, Unnim, and Cajasur.

Other two were the ATEbank in Greece and the Hypo Real Estate of Germany.

The assessment tests used to assess the ability of the banks to survive into the future economic shocks and recessions.

CEBS said that the seven banks need a total amount of £3.5 billion of additional capital to meet the standard requirements.

CEBS chairman Giovanni Carosio said that the banks need to agree together with the plan being handed to them over the period of time given by their supervisor that will explain how their weakness will be settled and solved.

The test was a move to assure the stockholders that the European financial sector was in a healthy condition.

The tests were on focus to an adverse unfavorable situation like a successive recession over the coming years. It is like of having sovereign debt shock as a financial crisis being experience by European countries like Greece.

Those banks that are stated above were failed in this given scenario. They failed to meet the 6% threshold given to them as the standard requirement.

However, based to CEBS the failure to meet that 6% standard limit for the banks did not mean that the bank was broke.

There are four major banks in UK were among to those that passed the stress tests. They are the Lloyds, RBS, Barclays and HSBC.

Financial Services Authority (FSA) carried out the test on behalf of the EU.

According to the FSA the outcome of the stresses expressed that UK banks are prepared and flexible enough when they undergo unlikely undesirable economic scenario and regression.