Former Bank of England Policy Maker David Blanchflower tells CNBC Europe's stress tests do not hold up to his kick it, punch it, poke it methodology.
"What we have seen is a political compromise. We are yet to understand how high a hurdle this really is," Blanchflower, now a Professor of Economics at Dartmouth College told CNBC as the stress test numbers hit the wires.
Blanchflower says if you raise the bar, others would fail. "It is not implausible to think Greece is going to default, you probably need a higher bar (for the tests)," he said.
With analysts now able to run their own stress tests, Blanchflower believes there could be far harsher visions of the health of the European banking industry.
"The market is going to be thinking, do our own tests have more credibility?" said Blancflower.
Asked if the news that only seven of the 91 banks tested would lead to interbank lending rates falling on Europe's periphery, Blanchflower was skeptical.
"If PIIGS could fly. The US tests had more credibility," he said.
Markets will need to know more about the tests before being able to react fully, other analysts said.
"We need a lot more information on the methodology used and we are not convinced that the stress tests were stressful enough," Gina Sanchez, director of equity and asset allocation strategy at Roubini Global Economics told CNBC.
"This does not change our view that Europe still has enormous problems and our outlook is not positive," Sanchez added. "We don't anticipate a double dip but our forecast remains flat. We really need to see the methodology that the Landesbanks (German regional banks) used."
Multiple Stress Tests?
Investors shouldn't take the test results at face value as the figures may not be telling the whole truth, Ralph Silva, director of Silva Research Network, told CNBC ahead of the test results' release Friday.
"We absolutely cannot trust the banks to be absolutely clear and the reason for that is we're not running one stress test; we're running multiple stress tests," Silva said.
When a regulator asks a bank how it will deal with house prices going down 50 percent, the bank will say it will simply bring the money in from another country, Silva said. Banks in other countries are going to give the same answer because they are all global banks that are being tested, he said.
- Watch the video above to see the full interview with Ralph Silva
"It's impossible to guarantee that they are going to be telling you the truth," Silva added.
Not only are the stress tests unlikely to yield accurate results, but they could endanger the recovery in the sector, according to Silva.
"You don't ask someone to run a marathon a week after they broke their leg. We are stress testing the banks in a position where they are recovering," he said.
"By doing these stress tests what we are in fact doing is highlighting the problems that are going to stop them from lending instead of encouraging them to lend," he added.
However, after the stress tests criteria were released, Silva said they were much tougher than the market had thought.
Actually if we have a majority of banks that pass this then the banks are doing much better than we expected, I didn't expect the test to be this tough."
"Six percent increase in unemployment is outstanding, we've never seen that in Europe and some of the other haircuts that they're taking are just enormous."
- Simon Dedman in London contributed to this report.