The 33 largest banks directly supervised by the European Central Bank (ECB) have become more resilient to financial shocks over the past two years, according to the results of the EU-wide stress test released on Friday.

The stress test, which was initiated and coordinated by the European Banking Authority (EBA) and undertaken in cooperation with the Competent Authorities, the ECB and the European Systemic Risk Board (ESRB), showed that the average Common Equity Tier 1 (CET1) capital ratio, a key measure of a bank's financial soundness, of all 33 banks after a three-year stress period was 9.9 percent, up from 8.8 percent two years ago.

"Thanks also to our supervision, banks have built up considerably more capital, while also reducing non-performing loans, and among other things, improving their internal controls and risk governance," said Daniele Nouy, Chair of the ECB's Supervisory Board.

"Looking ahead, the test helps us see where individual banks are most vulnerable and where clusters of banks are most sensitive to certain risks," she added.

In total, the 2018 EU-wide stress test covered 48 banks, representing 70 percent of banking assets in the European Union (EU), while the test did not contain a defined pass or fail threshold.

The objective of the test is to assess, in a consistent way, the resilience of banks to a common set of adverse shocks, since the results of the test are an input to the supervisory decision-making process and promote market discipline, according to EBA.