Two days ago, the European Central Bank's (ECB) annual report suggested that eurozone banks may have to reduce the value of their assets by $240 billion by 2011.
"Only this way can we restore true stability and confidence in this sector in the near-term," said Hoban, who mostly blamed ECB for creating "severe strains" in the banking system.
The European Union has moved forward with $1 trillion in help for struggling financial institutions as Greece's ability to repay its debt and concerns about banks in Spain and Portugal have caused widespread market volatility.
During the U.S. financial crisis, stress tests provided a measure of reassurance and required 10 U.S. banks to raise $75 billion from either private or government sources. In response, the Treasury Department provided for the availability of $700 billion.
But while that helped here, raising the fund may prove challenging for European banks and countries that are not only struggling but differ greatly in their economic structures.
European banking supervisors performed stress tests last year on the region's bank but released only limited details.