AUSTRALIAN banks will push ahead with debt fund-raising efforts in global markets, spurred on by the benign results emerging from a key test of the health of Europe's banks.

Of the 91 institutions involved in the test conducted by European banking authorities, just seven failed. This was well short of the 10 or more that had been expected to fail, prompting criticism the test wasn't tough enough.

The Committee of European Banking Supervisors scrutinises how banks would withstand a double-dip recession and sovereign debt crisis. Spain had five failures and Germany and Greece one each.

Collectively they need raise only €3.5 billion ($5 billion) in fresh capital to make themselves secure, much lower than the €30 billion many in the market were anticipating before the tests took place.

Australian bank treasurers told BusinessDay yesterday there was no direct bad news in the results that could trigger renewed volatility.

Many were fearful a negative outcome would have been enough to spark a fresh round of global credit market turmoil which could have pushed up funding costs. Australian banks are heavy users of international wholesale funds and have experienced a squeeze in margins as these costs have climbed over the past 18 months.

''While our banks need to raise funds from Europe, the European banks will be more relaxed about lending to their own,'' Brett Le Mesurier, of Axiome Equities, said.

Still, analysts said the results were not enough to lay credit markets worries completely to rest, particularly as the tests did not allow for a sovereign default. ''Initially there was a feeling the tests weren't rigorous enough. It seems to be well short of what people were expecting,'' Phillip Bailey of ADCM Services, a credit market consultancy, said.

A bank with a ratio below 6 per cent under the European measure was deemed to have failed and will have to raise capital to push its ratio above the threshold. The seven that failed were: Hypo Real Estate (Germany); the Agricultural Bank of Greece; and five Spanish savings banks: CajaSur, Caixa Catalunya, Caixa Sabadell, Caja Duero-Caja Espana and Banca Civica.

Several banks just passed the test and could come under pressure to bolster their capital further. Many had been hoping the test was an exercise that had the potential to restore market confidence to the same extent as a similar exercise across US banks early last year.

There, 10 banks were told they needed to raise about $US75 billion ($86.4 billion). Analysts were tipping at least 10 European banks would fail the threshold.

In May Australian banks passed their own version of a stress test, with the 20 banks surveyed surviving a simulation of a severe economic downturn.