Europe’s second attempt to assess the true state of its banks is likely to show investors that the region’s lenders are not in such bad shape as they may have feared. Analysts at Nomura say many are undervalued. The European Banking Authority said it will release the test results of 91 European banks on Friday (July 15).

Analysts expect the smaller unquoted Spanish cajas, or savings banks, and Germany's regional, and also unlisted Landesbanken, to be in most danger of failing, but the rest should be given clean bills of health. A pass requires that the banks have the ability to maintain minimum capital ratios of 5% following a seismic market shock - such as a sudden fall in equity prices or a sovereign debt crisis.