More than half of investors believe the European stress tests on the banking sector do not represent a material step forward in making the sector a better investment opportunity, according to a Bank of America Merrill Lynch survey, although they welcomed the increased transparency.

Five Spanish, one German and one Greek bank failed the European stress tests under the worst-case scenario conditions on Friday last week, with a less than expected aggregate capital shortfall of €3.5bn leading some to dub the tests insufficiently onerous.