Fitch Ratings says while the general framework for the latest round of stress testing on European banks “generally appears more promising” than its much-criticized predecessor, it still suffers from several key weaknesses. Among them, notes Fitch, is that some of the market indicators such as interest rate and equity markets stresses “look a little light.” In addition, sovereign default or restructuring is not considered in banking books and this will “likely...undermine some investors’ faith in the tests’ rigor.”

Click here to read the release from Fitch.