Stress tests of European banks will be published on Saturday in 05:00 am

On that note, the EBA will publish its 2016 stress-test results this Friday, July 29. The results will be absolutely crucial to understanding the health of Europe's banks -- 53 individual banks will be covered -- but it seems that the boffins at the European Union are not interested in widespread consumption of the results.

Why? Well, for starters, the EBA's stress-test results will be published at 10 p.m. local time on Friday. Releasing the results on a Friday night is akin to burying it, and, given the increasing pace of localized jihadist terror attacks on the Continent, it's likely that the news won't hit the front pages, anyway.

The last batch of the stress tests were published on October 26, 2014, and before that there hadn't been a publication since 2011. In 2014, the headline figure from the test results was the failure of 24 banks, 15 of which were located in Italy (including Banca dei Monte Paschi), Greece and Cyprus. The fact that Banca dei Monte Paschi is now, 20 months after its failing grade, in the throes of a crisis, is an indication that the structural reforms needed in the European banking sector have not occurred.

But that's the big question facing the European banking system: Will the macro problems overwhelm the individual banks? The iShares MSCI European Financials ETF (EUFN) is down a stunning 21.7% so far in 2016 and 32.1% in the past 12 months. If the damage is limited to Banca dei Monte Paschi and other systemically irrelevant banks, that's one thing. If, on the other hand, major players, such as Deutsche Bank (DB) , Commerzbank (which reported a sharp decline in its capital ratio in second-quarter results this morning), Royal Bank of Scotland (RBS) , or the Italian majors -- UniCredit (UNCFF) and Intesa Sanpaolo (ISNPY) -- start showing up in these stress test results, then it's time to worry about the near-term future for pan-European solvency.

Therefore, if there are any big banks, which do not meet the requirements of the stress test, we will witness growing speculations around the condition of the European financial system, which might cause a reduction on the European indexes on Monday.

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