So few banks failed Europe's long-awaited stress tests on Friday that investors will likely focus instead on the dozen or so banks that just scraped through when markets reopen next week.
Seven banks failed the unprecedented test of Europe's banking system -- including five small regional Spanish lenders -- and need to plug a much smaller-than-expected combined capital shortfall of 3.5 billion euros ($4.5 billion).
But the health check on 91 banks in 20 countries was criticized as being too soft. It was also overshadowed somewhat by a slew of data on European economies that suggested the banks may face less pressure and loan defaults than earlier thought.
That leaves investors to make up their own minds about particular banks, armed with the extra data the tests provided, including on sovereign bond holdings, to judge where further weak spots may be.
With so few banks failing, investors will question whether the economic scenarios are sufficiently severe, said Jon Peace, analyst at Nomura in London.
It will be natural for investors to consider the margin by which banks passed, he added, citing a good pass margin for Scandinavian and British banks, but Greek, Spanish and Italian banks faring less well.
Banks were tested on how they would withstand another recession in the next two years, including some losses on government bonds. They failed if their Tier 1 capital ratio dropped below 6 percent.
There were 17 banks whose ratio fell to between 6 percent and 7 percent.
They included Deutsche Postbank, Greece's Piraeus Bank, Allied Irish Banks, Italy's Monte dei Paschi di Siena and UBI Banca, Spain's Bankinter and eight smaller Spanish banks.
Even in the hours before the results w ere released National Bank of Greece, Slovenia's NLB and Civica in Spain all announced plans to raise capital.
Piraeus has already hired three investment banks to underwrite a capital increase of more than 1 billion euros, a Greek newspaper said on Saturday, although much of that may go on the acquisition of state stakes in two other Greek banks.
Postbank, Germany's largest retail bank by clients, identified its own capital shortfall months ago. The Bonn-based lender last year took drastic measures to improve capital, including scrapping its dividend, cutting staff and shrinking assets. It said it will continue with the overhaul.
Franz-Christoph Zeitler, Bundesbank's vice president, said: In the regulators' view no other German bank (other than Hypo Real Estate) needs further capital as the level of 6 percent is clearly above the regulatory minimum, but the markets could see that differently.
Italy's smaller banks will also come under scrutiny.
As we expected, bigger banks have higher capital ratios, while the market will probably say that banks such as Monte dei Paschi and Banco Popolare still lack adequate ratios, said Centrosim analyst Luca Comi.
ACCESS TO FUNDING?
A main aim of the test was to open up funding markets for banks who have been shut out in recent months. Those still deemed too risky could still have problems unless they raise more capital.
This isn't necessarily the last word, and if funding costs do not improve for some banks then we would not be surprised to see additional stress tests by some national central banks in the future, Nomura's Peace said.
Europe's so-called stress tests were never expected to show massive capital shortfalls, as its banks have also already raised about 300 billion euros since the start of the crisis. That includes about 170 billion euros of government support to 34 banks.
Just as investors take a view when markets reopen on Monday, Central bank governors and heads of supervision will meet in Switzerland to review proposed capital reforms, and the resilience shown by Europe's banks could make it harder for them to argue they cannot implement tough new rules.
The banks are ready to start implementing the new rules which are necessary to reinforce the capital provision and liquidity management of the banks, Vitor Constancio, ECB Vice President, told Reuters Insider after Friday's results.
(Additional reporting by Philipp Halstrick, Huw Jones, Antonella Ciancio and Angeliki Koutantou; editing by Patrick Graham)