We study whether regulators should reveal stress test results which contain imperfect information about banks financial health. Although disclosure restores market confidence in banks it misclassifies some healthy banks as risky. This encourages banks to choose portfolios that are deemed safe by regulators leading to model monoculture and making the financial system less diversified. Optimal policy involves a commitment to a bang-bang policy that is non-monotonic in the severity of adverse selection problems: the regulator should fully reveal stress test results when adverse selection is very severe or very mild but should never disclose the results otherwise.