Bank chief executives have been bullish in public about the stress tests. Christian Clausen, chief executive of Nordea, told CNBC Wednesday that he welcomed the tests and hoped they would give more transparency.
Yet European banks' share prices – including Nordea - fell across the board Wednesday morning after the ECB outlined its stress tests, while the euro also fell slightly against the dollar. This suggests the markets are not as optimistic about the banks' health as their chief executives.
"The stress tests will be conducted amid a shift from a bail-out to a bail-in regime for Europe's vulnerable banks and when there is continued uncertainty about the necessary backstops," Nicholas Spiro, managing director at Spiro Sovereign Strategy, warned.
"There's a danger that eurozone policymakers are putting the cart before the horse."
There was some relief that the banks would not have to meet higher capital requirements, at the start of the assessment next month.
And some analysts argued that the banks have improved since the days of the credit crisis.
"The operating environment looks to us to be less hostile than in recent times and much hard work has been done on balance sheet improvements," Nigel Myer, director of credit strategy at Lloyds, said.
Yet fundamental concerns remain over the "debt spiral" linking higher government exposure to weak banks, the health of banks themselves and weak economic growth will be difficult to break.
"It doesn't matter how stress-tested and well-capitalized you think peripheral bank ABC is, if you think the sovereign is going to need a PSI or will default, then the bank is uninvestable," Neil Williamson, head of EMEA credit research at Aberdeen Asset Management, said.