Financial Sector: 8 banks flunk European stress test; 16 more barely pass

Eight of 90 European banks flunked stress tests projecting how they would fare in another recession, and 16 more barely passed — but the results proved controversial.

As it presented the results Friday, the European Banking Authority said the failing banks should quickly take steps to thicken their financial cushions by a total of 2.5 billion euros ($3.5 billion). The banks that barely passed would also have to boost their finances in coming months.

But while markets appeared sanguine about the results — the euro barely moved — experts warned that the tests were likely not rigorous enough because they did not simulate a debt default, which many expect is inevitable in Greece.

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