Bankers and officials in Spain, Greece and Belgium joined a swell of countries saying they saw no big shocks from Europe's stress test of its banks, although doubts linger whether the health check will be severe or transparent enough.
Results of the test of 91 European banks will be published after markets close on Friday, assessing how they would cope with another economic downturn and losses on Greek and some other government bonds.
The aim is to restore investor confidence by pinpointing any weak spots and forcing vulnerable banks to raise cash.
"With banks having already rallied and with many countries having declared that their banks are likely to pass, we see risks of disappointment," said Jon Peace, analyst at Nomura in London.
He said shares could extend gains if sufficient transparency can be delivered so investors can make their own calculations of the risks, and if the recapitalisation mechanisms such as Spain's FROB, Germany's SoFFin and a wider European Financial Stability Facility are available for struggling banks.
Belgium's KBC and Dexia have passed the tests, two Belgian newspapers said over the weekend, citing sources saying the government would not be called upon again to bail out either group.
Spain's banks or cajas will get no nasty surprises from the tests, according to the director general of the Spanish Confederation of Savings Banks (CECA).
Jose Antonio Olavarrieta did not rule out banks having to seek more capital from the Bank of Spain's restructuring fund FROB, however. He said in the interview with ABC newspaper he hoped the tests would help improve conditions in money markets, which have shut out smaller Spanish banks.
Greece's central bank chief said he expected the country's lenders being tested to come through the stress tests.
"My feeling is that things will go smoothly for the six Greek banks included in the sample," George Provopoulos, governor of the Bank of Greece, said in an interview published in newspaper Imerisia.
The regional Spanish cajas, Germany's landesbanks and Greece's bank sector top the list of those most likely to need capital under a stressed scenario, analysts have said.
Barclays Capital analysts estimated the capital needs of the cajas at €36 billion, €34 billion for the landesbanks and €8.6 billion for Greek banks.
Some analysts had said KBC and Dexia could also screen more poorly than big rivals, but without falling to danger levels.
A growing concern is the test criteria will not be consistently applied across the 20 countries.
European Union officials have agreed the key criteria of the tests, which will be coordinated by the Committee of European Banking Supervisors (CEBS). But there are fears national regulators will differ on what qualifies as core capital, for example.
Reuters