European Central Bank reported that 25 Eurozone banks failed the financial health exam which determines if they will be able to withstand another economic crisis again.
The 25 out of 150 leading Eurozone banks reportedly had fallen short of what analysts and investors' predicted, with a total capital loss of 25 billion euros.
However, the ECB also said that the banks' capital losses have reportedly declined with 10 billion euros to be raised and 12 banks have already raised 15 billion euros this year to recover.
The ECB discovered that Italy, Greece and Cyprus had the heaviest burden among the banks analysed; Italy reportedly had 9 out of 10 banks falling short while 2 banks are still struggling to raise money.
The report by the ECB is said to provide valuable data on how the banks can improve their "resiliency" amidst economic breakdown. It also shows how the eurozone's banks have coursed through after over 7 years since the financial crisis struck that endangered several countries to bankruptcy.
"This unprecedented in-depth review of the largest banks' positions will boost public confidence in the banking sector," said ECB Vice President Vítor Constâncio.
"By identifying problems and risks, it will help repair balance sheets and make the banks more resilient and robust. This should facilitate more lending in Europe, which will help economic growth," Constancio added.
The results from the study could reportedly push banks to lend more as the Eurozone's economic growth is slowly declining.
European Central Bank Vice President Vitor Constancio said the results could encourage banks to lend.
"There is some pick up (in demand), but it is still slight," Constancio told Reuters. "All this now can really start to change the environment and we hope it will also change the reality," Constancio said in an interview with Reuters.
