The biggest loser was Banca Monte dei Paschi di Siena (MPS), the world's oldest bank, which has a hole of €2.1 billion to fill, according to theresults of the banking stress-test published on Sunday by the European Banking Authority.
Banca Carige, Banca Popolare di Milano and Banca Popolare di Vicenza were also on the list of 25 European banks to have failed the test, leaving a total shortfall of €25 billion across the economic bloc.
Share in MPS fell 15 percent on Milan's stock exchange on Monday morning, while Banca Carige's shares were down 15.79 per cent.
Officials at the Bank of Italy hit back, saying the parameters used in the test were "unrealistically harsh" and disputed the number of failures, the UK's Financial Times reported on Sunday.
The banks, which included three from Greece, two from Belgium, and one each from France and Germany, have nine months to fill the shortfall or risk closure.
But it was good news for Italy's two biggest banks – UniCredit and Intesa Sanpaolo – which passed the stress test.