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Stress Tests Missing Sovereign Default Fail to Convince

European banks may have to raise as much as 80 billion euros ($112 billion) of additional capital as the stress tests failed to allay investor concern about a Greek default and governments’ ability to bail out their lenders.

The eight banks that failed out of the 90 tested on July 15 had only a combined capital shortfall of 2.5 billion euros, the European Banking Authority said July 15. As many as 20 banks need to bolster capital, JPMorgan Cazenove analysts led by Kian Abouhossein wrote in a report after the results were published.