The results of the stress tests on 19 of the biggest US banks have left European banks exposed, as they now look vulnerable to recapitalization needs and to claims that not all checks were made to ensure rules were being followed, analysts said on Friday.
"Compared to the US, the European banking system is rapidly being left behind on the bank recapitalization front," UBS analysts said in a research note.
"Unlike the US stress test that set out clear objectives, framework, and deadlines, there is no major policy initiative to recapitalize banks in Europe," they added.
European bank stocks rallied Friday, boosted by relief that no bad surprises arose from the results of the US stress tests, but UBS kept its underweight recommendation, while upgrading their weighting on US banks' stocks to neutral from underweight.
The stress tests' major effect was the removal of uncertainty and this is why US bank stocks surged, Giorgio Questa from Cass Business School told CNBC's "Squawk Box Europe."