All four UK banks have passed the European Banking Authority's European Union-wide stress testing exercise, aimed at testing their resilience.

Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland Group all passed the stress-testing exercise.

Barclays had a core tier 1 ratio of 7.3 per cent under the stress tests, HSBC had 8.5 per cent, Lloyds had 7.7 per cent, while RBS had a 6.3 per cent ratio.

The European Banking Authority (EBA) analysed 90 banks in 21 countries to assess how banks capital ratios would be affected under adverse conditions.

Just eight banks from across Europe would fail the EBA's stress test with a core Tier 1 ratio of less than 5 per cent at the end of April 2011, compared with 20 at the end of 2010.

The EBA made a formal recommendation to supervisory bodies to require the eight banks to act 'promptly' to shore up their capital.

It also recommended banks with close to the 5 per cent threshold with sizeable sovereign debt should also make moves to strengthen.

Spain had the most banks to fail under the EBA's stress testing exercise, with seven failing, Greece two, and Austria one.

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