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The results of tests on EU banks' ability to withstand financial shocks face their own stress test in the markets on Monday, with early signs pointing to a more positive response.
European Union policymakers and regulators voiced relief at Friday's results. But some market analysts and many media commentators criticized the tests, in which all listed banks passed, as lacking in credibility. There was skepticism about EU regulators' conclusion that banks need only a total of 3.5 billion euros in extra capital. Market expectations had ranged from 30 to 100 billion euros, although many European banks have already raised capital during the financial crisis.
In the first market reaction in New York late on Friday, the cost of insuring the debt of large European banks fell further and the euro rose against the dollar despite worries about the tests' credibility.
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