Bankers and officials in Spain, Greece and Belgium joined a chorus of countries expecting no big shocks from Europe's stress test of its banks amid lingering doubts the health check will be severe or transparent enough.
The Committee of European Banking Supervisors (CEBS), which is overseeing the test of 91 banks, said results will be released on an aggregated and bank-by-bank basis Friday.
CEBS will release an overview, and banks or national regulators will release individual results.
The tests will assess how banks would cope with another economic downturn and losses on Greek and some other government bonds. The aim is to restore investor confidence by pinpointing any weak spots and forcing vulnerable banks to raise cash.
"With banks having already rallied and with many countries having declared that their banks are likely to pass, we see risks of disappointment," said Jon Peace, analyst at Nomura in London.
He said shares could extend gains if sufficient transparency allowed investors to make their own calculations of the risks, and if the recapitalization mechanisms such as Spain's FROB, Germany's SoFFin and a wider European Financial Stability Facility are available for struggling banks.
Belgium's KBC and Dexia have passed the tests, two Belgian newspapers said over the weekend, citing sources saying the government would not be called upon again to bail out either group.
Spain's banks and cajas will get no nasty surprises from the tests, according to the director general of the Spanish Confederation of Savings Banks (CECA).
But Jose Antonio Olavarrieta did not rule out banks having to seek more capital from the Bank of Spain's restructuring fund FROB.
He said in an interview with ABC newspaper he hoped the tests would help improve conditions in money markets, which have shut out smaller Spanish banks.
"They (saving banks) are the ones the market is more concerned about because they have been accessing the wholesale markets and are very much part of the local financial system," said Ian Henderson, fund manager JP Morgan Global Financials fund.
"The idea of the stress test is to reassure Asian sovereign wealth funds investing in paper issued by these savings banks that in fact they are not buying a lemon. They want some confidence to be restored to the system," he said.
Greece's central bank chief said he expected the country's six lenders being tested to come "smoothly" through the stress tests.
The regional Spanish cajas, Germany's landesbanks and Greece's bank sector top the list of those most likely to need capital under a stressed scenario, analysts have said.
Barclays Capital analysts estimated the capital needs of the cajas at 36 billion euros ($46.68 billion), 34 billion euros for the landesbanks and 8.6 billion euros for Greek banks.
A growing concern is the test criteria will not be consistently applied across the 20 countries.
European Union officials have agreed the key criteria of the tests, but there are fears national regulators will differ on what qualifies as core capital, for example.
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