Markets breathed a sigh of relief on Friday. And as for the politicians, if you had put your ear to the nearest window on Friday afternoon and listened very carefully, you would have heard their sigh as it emitted synchronously across the length and breadth of Europe.

It seems the EU’s banks are in good health. Only a miserly amount of money is required to avoid the reoccurrence of a banking crisis. Hurrah for that.

It is just that bankers, politicians and regulators have just made complete nincompoops of each other.

The author’s local Indian restaurant engenders stress. The menu is so varied, that choosing the right dish can be quite a challenge. Then there’s the local beer festival; how can one possibly know which beer to taste? And finally there are your decent chocolatiers. Selecting the right chocolate – now that is stressful.

But, you know what, maybe none of these three tasks are that bad. Indeed, some may even call them pleasures. It is just that in the great league chart of stress, with moving, giving birth, or sitting final exams near the top, and choosing the right beer near the bottom, the latest stress tests from the EU for its banks are down there with curry, beer and chocolate choosing.

In all, 91 banks were tested. Just seven failed. And everyone had expected these failures anyway. Take the German bank Hypo Real Estate. Now, when this bank sat its SATs back in the bad old days of early 2009, it got a D-minus and was subjected to special needs, meaning it got rescued by the German government. Greece’s ATE bank didn’t fare much better, and sure enough it is still failing. Then there was a quintet of Spanish banks; they failed, too. But the rest are fine. If the roof falls in, the banks will carry on banking as if nothing had happened.

All that the EU has to do is lay its hands on 3.5bn euros to boost the assets at its more troubled banks. Why, it costs more than that to clean up an oil leak.

And if you believe that, we would like to recommend a good book. It is called Gullible’s Travels.

Problem number one, the stress tests assumed a worst case scenario of a 0.2 per cent contraction in the eurozone economy this year and a 0.6 per cent contraction next. They assumed that some government bonds may lose value, but absolutely did not consider the danger of a sovereign default.

Since most EU politicians would say that a sovereign default is not going to happen, one could say their optimism makes sense. It is just that some people, horror of horrors, think their rosy view on the likelihood of default is misplaced, and that Greece, then Spain and Portugal, then Italy and Ireland, and then maybe France, will default, one after the other as workers recoil at the sacrifices they have to make; then will demand exit from the euro, which in turn will push up the value of their government’s debt, when measured in euros, to unsustainable levels.

Problem number two with the stress tests: for banks to pass they must be able to maintain a Tier 1 capital ratio under the conditions of the worst-case scenario defined by its soft examiner. But what counts as assets? If a bank can point to assets in the form of government bonds, and say, ‘See, we are secure,’ and then the bonds crash in value as certain countries default, what use are these assets?

Problem number three: we have been kept in the dark over what makes up the assets of some of the banks in question. So analysts just don’t know how secure the banks in question really are.

Alas, these stress tests are no more than a fairly feeble attempt to prop up market confidence.

It is as if the EU has taken a leaf out of Japan’s book, which dealt with its financial crisis of 20 years ago by pretending the problem wasn’t really that serious. The truth is, there are few things more stressful than cheating in a test and then getting caught.