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ECB List of Failing Banks Shrinks If You Read Small Print

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Most of the lenders that failed the European Central Bank’s balance-sheet test have been let off for good behavior.

Only eight banks haven’t already plugged capital gaps or satisfied the ECB with plans to shrink, out of 25 found with a shortfall. That means just 6.35 billion euros ($8 billion) remains from a 25 billion-euro hole, and half of that is in Italy. The ECB, releasing results of its year-long bank audit yesterday, said investors should focus on the insight they’ve gained into lenders’ books instead.