NEW YORK (Reuters) - On Thursday, the U.S. government is expected to reveal the results of stress tests applied to the 19 largest U.S. banks, including which ones need to raise additional capital and how much.

It is still unclear how much information on each bank will be released.

Reuters asked some top investors and analysts what would make the whole exercise credible or not, and what results would concern them or make them feel favorably toward the sector.

THE ADVERSE SCENARIO

“First of all, let’s remember what this is not. It is not a solvency test,” said Jim Bianco, president of independent firm Bianco Research in Chicago, which tracks and analyzes macroeconomic and market trends.

“All of these banks are currently solvent as we know it. The government has laid out what they call the ‘more adverse’ scenario. And the question is if that scenario happens, are the banks capitalized enough to meet that scenario.

“So the first bit of information we need to get from the banks is what do they think the markdowns are going to be on the more adverse scenario.

“In other words, if we get the minus 3.3 percent fall in GDP this year, if we get the 9 percent unemployment rate and the 22 percent fall on home prices this year, then they expect various types of loans to fall by how much?”

Bianco said: “The first thing we are going to have to look at is: Is the more adverse scenario a credible thing for us to view? If you do think that that’s plausible, then are the markdowns and losses the banks expect under this scenario realistic? Third, do you think they’ve actually got the capital ratios right?”

The problem with all of this is that the results of the stress tests were delayed by four days, he added. “They’ve delayed this precisely so that they could politicize the capital numbers.”

A GUIDE TO GOOD AND BAD BANKS

“It is clear that the test would lose credibility if everyone passed,” said Keith Wirtz, president and chief investment officer of Fifth Third Asset Management, which manages $22 billion.

“That would suggest that the bar was set low and this was all a gimmick to begin with and a way to give the market a sense of comfort. I don’t think that is what is really going on, however. We do take the test seriously to some degree.

“If the government really does favor banks to have tangible common equity, or TCE, of about 4 percent of a bank’s assets over the next two years to withstand losses in case the recession worsens, then that brings some legitimacy to the test,” Wirtz said.

“TCE is more objective and clear while so-called Tier 1 capital worth -- a broader measure monitored by regulators -- has more subjectivity associated. The market will start to discriminate between good banks and bad banks, in my opinion.” Fifth Third Bancorp is one of the 19 firms undergoing the stress tests.

THE SURVIVORS CAN EARN GREAT RETURNS

“Clearly there was a whole lot of pessimism baked into bank share prices,” said David Harris, chief investment officer at Rockefeller & Co, with about $25 billion in assets under management.

Referring to Wells Fargo & Co, JPMorgan Chase & Co and Bank of America Corp, he said: “They’re going to be earning a lot of money over the next few years; their deposit bases are bigger by far than they’ve ever been, which will reduce competition and help improve net-interest margins.

“The survivors are bigger, stronger and will earn great returns that will offset this balance sheet deterioration,” he added.