Associated Press
July 22, 2010

BERLIN (AP) - Europe faces another moment of truth in its simmering debt crisis on Friday as regulators release the results of "stress tests" on 91 banks across the continent, an exercise that some fear could fail to credibly answer markets' questions.

The hope is that the operation, like stress tests carried out on 19 U.S. banks a year ago, will help shore up confidence. In that exercise, 10 banks were told to raise about $75 billion in extra capital.

But the sprawling European tests come with potential risks - particularly as little is known about how the London-based Committee of European Banking Supervisors (CEBS), which will release the overall results, is conducting its analysis.

Experts fear that bad news could badly hurt markets again, while too rosy a picture may prompt investors to think the tests weren't rigorous enough.

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