This EU stage managed exercise will be published at 5pm, after the EU markets close, but unfortunately the US markets will still be open to give an instant verdict on the results of these tests designed to reassure the markets. Some banks are expected to fail, mainly the small Spanish cajas and a larger German property lending bank. Property lending will be the common factor in failing banks.
Personally I find this exercise unbelievable for small club Med banks. I once tried to find out from the Banca d'Italia how many banks there were in Italy. The answer was they did not know but certainly over 1000! Difficult to stress test banks you don't know about.
The big hole in the tests will be the exclusion of sovereign default by Greece or Spain. The standard regulatory response is if we put it in the markets would think we knew something bad secret about these banks. True in part but the real reason is it would be disastrous for the great EU project to even admit the possibility of a sovereign default.
Most of the bad results, Spanish cajas etc, have already been leaked to massage public expectations. How will the market react? I don't know. Its usual to say the devil will be in the detail or in this case the detail of what is omitted.