Analysis of the results stress tests on 91 European banks continued Monday, with some analysts seeing the tests as helping investor confidence, and others more doubtful.

The stress test results highlighted a capital deficit of only 3.5 billion euros for the seven banks that “failed” the test set by regulators. Markets were expecting much bigger deficits.

Analysts at J.P. Morgan say the tests were simply too weak. “In our view this exercise does little to repair bank balance sheets and, as a result, is unlikely to restore financial confidence,” they say in a research report. J.P. Morgan calculates that if stress test parameters were made more rigorous and/or capital adequacy standards were tightened, 54 banks would have failed this tougher stress test, revealing a capital shortfall of 67 billion euros.

“Given the general sense of disbelief that has accompanied the stress test results, we do not expect investor confidence in peripheral area banks/economies to return quickly,” it concludes.

IHS Global Insight says that the strong point of the European bank stress tests “is that the results are transparent and published at an institution level. They also include each bank’s exposure to sovereign debt, something the markets had wanted to see for a long time. These features are important given that the aim of the exercise was to bolster overall confidence in the European banking system, ease tensions in the inter-bank market, and calm market nerves over the sector. In particular, it was hoped that the tests would remove unfounded suspicion over healthy banks.”

It suggests that this effort has been “modestly successful”, as the markets have not reacted much to the findings. Nevertheless, it allows that the tests are being criticized for not being stressful enough, “and as a result they are unlikely to put to bed all of the concerns about the European banking sector.”

Fitch Ratings declared that there are no direct ratings implications for the banks that it rates that failed the EU bank stress tests, or are part of a Spanish merger group that showed a capital shortfall.

“Most of Europe’s largest cross border banks ‘passed’ the stress tests comfortably enough to offset market concerns over the severity or design of the tests. They should therefore be better placed to access the markets satisfactorily, albeit at varying prices, now that the results and the stress testing methodology have been published. This should provide relative ratings stability,” Fitch says. It notes that banks in Austria, Belgium, France, the Netherlands, Scandinavia and the UK generally fit into this category, as do the major Swiss banks, which were not subjected to the EU tests but were tested independently.

Fitch believes banks that just barely passed the test may still need or elect to raise additional capital or outline credible de-leverage plans. “This is particularly true for banks with a high reliance on the wholesale funding markets, particularly if they operate in or hold material sovereign exposure to the eurozone countries where markets’ sovereign risk concerns have been greatest. Where European banks are unable to raise capital in the public markets, Fitch believes government funds will be made available,” it says.

Fitch reports that 17 banks ‘passed’ the 6% tier 1 test, but had tier 1 ratios of less than 7%. it calculates that approximately 12 billion euros of capital would need to be raised by 24 of the stress-tested banks for all of their tier 1 ratios to exceed 7%.

The rating agency says its main concern continues to be the impaired access of certain banks in Spain, Portugal, Ireland and Greece to the debt and money markets. In particular, certain banks in Spain and Portugal are most at risk of further rating downgrades unless their wholesale funding access improves soon, it says.

IE