While both banks were judged to have enough capital to pass the Fed's minimum capital requirements, "widespread and substantial weaknesses across their capital planning processes" were identified by the central bank. Essentially, the banks have not failed in terms of their capital position, but in the quality of their analysis of risk. Some investors argue that this is not much to worry about.
This is the second year in a row Santander has failed the tests, while Deutsche's U.S. unit failed them the first year it took them. However, It was the first time all of the U.S. domestic banks passed the stress tests since they began in 2009.
"The European banks have only failed at the margins," Dennis Gartman, the influential investor and author of the "Gartman Letter", who dismissed the tests as "borderline silly", told CNBC Thursday.
"I'm not that concerned, nor do I think anyone else should be. In the case of the stress tests, we know when they will be administered and what questions they have to answer – the fact that anyone will have failed is beyond belief."