All of Spain's banks except Liderbank were shown to need no extra capital in a financial audit conducted by the ECB, with the results making Spain's banks the tenth most solvent among the 22 countries surveyed.
The findings contrasted sharply with other parts of the eurozone where nearly one in five lenders were found to be still on shaky financial foundations.
A total 25 of the 130 banks flunked the audit, the ECB said, although none of them were among world leaders.
The European Commission praised the tests as "robust exercises, unprecedented in scale and among the most stringent worldwide". It said the assessments will "provide a high level of transparency on EU banks’ balance sheet and data exposure as of end-2013 and allow the identification and redress of any remaining vulnerabilities".
The goal was that financial institutions "can again provide affordable lending to the real economy, to households and SMEs (small and medium enterprises) in particular".
Banks with shortfalls must prepare capital plans within two weeks and have up to nine months to cover the gaps.
As part of the audit, the ECB also reviewed the quality of bank assets to make sure they were accurately valued.
The stress tests were carried out by the European Banking Authority (EBA) in London, which ran the banks through two different economic scenarios to see if their balance sheets are healthy enough to withstand further economic shocks.
Under a baseline scenario, a bank’s core capital ratio, a measurement of financial strength, must not fall below 8.0 per cent. In the adverse scenario, it must not fall below 5.5 per cent.
The Wall Street Journal noted that Spain's Banco Santander, the eurozone’s largest bank by market value, passed with a core capital buffer of 10.34 per cent.
Only Spain's Liderbank, failed after being shown to have a €32.2 million ($40.1 million) capital deficit.
Bank of Spain Governor Luis Maria Linde said in a press conference, "The reform and restructuring process of the Spanish banking system carried out in recent years has borne fruit".