The European Debt Crisis

Several of Spain's 18 savings banks, including some of those which have been involved in recent mergers, have failed to pass tests to see how strong they would be if economic circumstances were more adverse, newspaper El Pais reported on Friday citing financial sources.

Three European banks have revealed capital-raising plans  before the results of stress tests were due to be made public, the FT reports.

A bank fails the test if its Tier-1 capital ratio is below 6 percent under two scenarios: adverse scenario and adverse scenario plus sovereign risk.

The problem is that while the tests may look like those America held in May of last year, their credibility is questionable, and they may not calm investor jitters.