The cost of protecting government debt against default in Greece, Spain and other peripheral euro zone debt issuers fell on Tuesday as investors switched back to riskier assets post-bank stress tests.

Five-year credit default swaps (CDS) on Greek government debt fell to 690 basis points, down 30 bps on the day, according to data from CDS monitor Markit.

It means the cost falls to 690,000 euros to protect 10 mln euros-worth of Greek government bonds.

Over the past 28 days, the Greek CDS has fallen by 255 bps Markit said.

Spanish CDS fell by 9 bps to 180 bps, Portuguese CDS was 16 bps lower at 235 bps and Irish was down 15 bps at 216 bps.

"The stress tests, despite their shortcomings, appear to have eased the concerns of investors around the European banking system," said Markit in a statement.

"The transparency given by the release of bank sovereign debt holdings - matched belatedly by Deutsche Bank this morning - has been a clear positive development for risky assets. Deutsche's and UBS' solid Q2 results have offered more encouragement."