The stress tests' findings, released by consultants Oliver Wyman, will help the country decide how much money it will tap from a €100 billion European loan facility offered back in June to prop up its financial sector.
Spain's banks have been struggling under the weight of toxic assets stemming from the collapse of the country's property market in 2008. Saddled with these bad loans and failed building projects, the country's banks have been reluctant to loan out more money to businesses and households, stunting the economy. The European loan facility is to be used to cover these bad loans and shortfalls, thereby freeing up the banks to do business again.
The Bank of Spain's figure does not include the impact of ongoing banking mergers or taxation. Including those two elements, the shortfall drops to €53.7 billion.
Bank of Spain deputy governor Fernando Restoy said some 400 auditors went through the books of 14 lenders — about 90 per cent of the Spanish banking system — analyzing their capital cushions under adverse scenarios.
"We wanted (the tests) to be the toughest ever," Restoy told reporters at a news conference.
Jean-Claude Juncker, head of the eurozone group of countries, said he was "comforted" by the results, saying the €100 billion earmarked to help Spanish lenders "should be more than adequate" for their capital needs.
The agreed aid "should ensure that the recapitalisation process of banks can proceed efficiently and in accordance with previously agreed timelines," Juncker said in a statement.
While European stock and bond markets were closed, the euro edged up — to $1.2875 from $1.2860 before the release of the stress test results.
The European Commission said the tests were "a major step in implementing the financial-assistance program and toward strengthening the viability of and confidence in the Spanish banking sector."
It said in a statement that recapitalization of a first group of banks is scheduled to occur by November, following approval by Spanish and European authorities.
Restoy said the lenders needing to shore up their capital will have to tell the government whether they need public aid or intend to raise their own funds.
Hatton contributed from Lisbon