The European Central Bank has said that it will use information gathered as part of its review of the assets held on the balance sheets of the eurozone’s largest banks to ensure its stress tests of the lenders are more credible than previous exercises, the Financial Times reported today. The central bank will use a traffic light system to check the results from banks in stress tests, with a red light forcing banks to redo their work. Amber signals mean lenders will either have to restate their results or provide further evidence supporting the outcome.

The French economy will keep expanding at a slow pace in the third quarter of the year, the Bank of France said today, while other statistics showed industrial production rising more than expected in June, but no improvement in public finances, the Wall Street Journal reported today. France's economy will grow 0.2 percent in the third quarter from the second, the Bank of France said in its monthly business climate survey. That follows the same quarterly expansion in the second quarter, according to the central bank's previous survey.

Mario Draghi, the president of the European Central Bank, today warned “heightened geopolitical risks” threatened to halt the weak recovery in the eurozone, the Financial Times reported today. Draghi pointed to the crisis in Ukraine, where Russian-backed rebels have been fighting government forces for months, as one of the reasons the eurozone recovery may stall.

Portuguese banks will work together with the authorities for the swiftest sale of the new, healthy bank carved out of the troubled Banco Espirito Santo, the head of the Portuguese Banking Association (APB) said yesterday, Reuters reported. Fernando Faria de Oliveira told Reuters that the intervention by the Bank of Portugal to rescue one of the country's largest lenders that involved an injection of 4.9 billion euros mostly in state loans, was positive considering BES's systemic importance.

Two Russian travel operators declared bankruptcy as sanctions over Ukraine weaken the ruble and curb demand for foreign travel, particularly among state employees, Bloomberg News reported yesterday. Moscow-based Labirint suspended operations Aug. 2, while Intaer followed today, cutting off services to about 30,000 customers who bought trips to destinations including Greece, Turkey and Egypt, according to the Federal Tourism Agency.

A panel of the International Swaps and Derivatives Association today ruled that the Portuguese central bank's decision to break up Banco Espírito Santo won't trigger a payout on insurance-like contracts linked to the stricken lender's debt, the Wall Street Journal reported today. ISDA was asked on Monday to rule whether the Portuguese Central Bank's decision to split BES into two would qualify as a bankruptcy credit event, meaning that any contracts on BES debt—known as credit default swaps—would be activated.

Insolvent project developer Solarstrom has sold the last three projects in its German portfolio with a total capacity of 5MW, PV-Tech.com reported today. The company also confirmed that it is in talks with investors from Asia, Europe and North America about its long-term future. The collapse of equipment suppliers and delays to project sales created a cashflow problem that forced the company into insolvency. With impending project sales in Italy, the firm is optimistic that it will meet its obligations and secure an investor.

Italy fell back into recession for the third time since 2008, data showed today, building up pressure on Prime Minister Matteo Renzi to accelerate the pace of economic reforms while keeping the country's accounts in order, the Wall Street Journal reported yesterday. Gross domestic product in the euro zone's third-largest economy dropped 0.2 percent in the second quarter of 2014 from the previous three months, national statistics institute Istat said today, citing preliminary data.

Crédit Agricole SA said that it was "cheated" and kept in the dark about Banco Espírito Santo SA 's dealings with its troubled parent company, after the crisis facing the Portuguese lender nearly wiped away all of the French bank's profit in the second quarter, the Wall Street Journal reported today.

Portugal’s rescue of Banco Espirito Santo SA may have eased some doubts about Europe’s banking industry by showing investors how the European Union’s thinking has evolved on handling failing lenders, Bloomberg News reported today. The decision shielding some creditors spurred a rally in bank stocks and Portuguese assets yesterday as it demonstrated authorities were able to shutter a bank without sparking a fresh bout of market tensions that have roiled Europe since 2009.