According to the Bank of Portugal, the four Portuguese banks subjected to the European Banking Authority (EBA) financial stress test this week, passed the test, showing they have all the capital ratios required by the international banking authority.

The four banks are Banco Comercial Português (BCP), Banco Português de Investimento (BPI), Banco Espírito Santo (BES) and state-run Caixa Geral de Depósitos (CGD), the main banks in the country.

The European Banking Authority (EBA) said Friday, that 8 of 90 European banks failed the stress test. The eight failing banks include two Greek banks, five Spanish and one Austrian bank have failed the European Banking Authority’s (EBA) stress tests.  All of the Dutch, British, French, Italian, German and Portuguese banks passed the test, the source said.

Stress tests assess the capital ratios that each bank has in order to evaluate its ability to operate in a difficult environment, such as the financially stressed situation Europe is undergoing today.

Last week, Moody’s Investor Services downgraded Portugal’s sovereign rating to “junk status” predicting that the country might need a second bailout and that Portuguese banks would need help.

By passing the stress test, Portuguese banks showed they are in a better position to meet the conditions set by the €78 billion-euro financial bailout agreed in May with the European Union, the International Monetary Fund and the European Central Bank.

Bailout terms include requirements for banks to raise their capital ratios and set aside €12 billion-euros for recapitalization needs.

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