The results will be released at 4am tomorrow New Zealand time, after European and United States markets have closed on their Friday nights.
European regulators plan to detail three scenarios when they publish the results of the stress tests on the region's banks.
The regulators are examining the strength of 91 banks to determine if they can survive potential losses from both a recession and in the value of their government bond holdings.
Craigs Investment Partners broker Peter McIntyre said yesterday the tests were being used to reassure investors about the health of financial institutions as the debt crisis pummelled the bonds of Greece, Spain and Portugal.
The tests included the banks reporting their Tier 1 capital ratio - or accessible cash - which they could use in several adverse scenarios.
The Tier 1 ratio was a key measure of financial strength, and must be kept at 6% or above by the European banks, he said. That was lower than in New Zealand where the ratio was above 8%.
The 91 banks would also have to provide information on their sovereign stock, particularly on bonds issued in Greece or Spain.
In the event of those countries, plus others, defaulting on their debt, the regulators would want to know if they could survive potential losses.
Analysts were questioning whether the regulators were being hard enough on the banks and some believed the tests did not go far enough, Mr McIntyre said.
Reuters reported that European Central Bank council member Ewald Nowotny's defence of bank stress tests came as a German bank lobby said the regional Landesbanken would pass.
Upbeat comments from officials in France, Greece and elsewhere raised concerns the process might not be tough or transparent enough.
The Landesbanken are a group of state-owned banks unique to Germany. They are regionally organised and their business is predominantly wholesale banking.
Several Spanish "cajas" - a savings bank similar to a credit union - were also expected to fail.
Mr McIntyre said Craigs expected a capital shortfall in German, Spanish and Greek banks and that they would fail the test. Between 10 and 20 were expected to fail the Tier 1 test.
"This is core news for the market and the driver of where markets head next week. So far we have been focused on second-half earnings from the United States."
Craigs estimated through its research that 100 billion ($NZ180 billion) would need to be raised for troubled banks to recapitalise themselves.
Asked how they would get the money, Mr McIntyre said most of the banks were listed and would go to shareholders in a capital raising. Some would ask for bailouts and others would be folded into larger banks.
He expected merger and acquisition activity to start soon.
The test results would provide a snapshot of whether economic conditions were getting worse in Europe.
The stress test was not the only thing occupying financial markets yesterday, with the US dollar sliding to a seven-month low against the yen after Federal Reserve chairman Ben Bernanke expressed concern about the US economy.
Mr Bernanke stopped short of signalling further easing of already low interest rates as some had hoped.
The euro, which lost ground sharply after his comments sparked outflows from stocks and other risks assets, held steady at lower levels ahead of the stress-test results.
Mr Bernanke, in testimony prepared for delivery to the Senate banking committee, said the US economy faced "unusually uncertain" prospects.
The Fed was ready to take further steps to bolster growth if needed, he said. However, analysts said lack of clarity on what measures it could take prompted investors to reduce risk positions.
