* Bank of America denies it is trying to raise $10 billion

* KBW Index up 14.7 pct on hopes capital hole manageable

* JPMorgan's Dimon says banks can handle losses (Adds Citigroup capital need)

By Emily Kaiser and Karey Wutkowski

WASHINGTON, May 4 (Reuters) - The largest U.S. banks made the case to regulators on Monday that they have the financial firepower to withstand a deeper recession, as Bank of America denied a report it was trying to raise capital of $10 billion.

Banks and regulators were in tense discussions over the findings of so-called "stress tests" aimed at assessing whether the 19 largest firms have a sufficient capital cushion. Final results are expected to be disclosed on Thursday.

"Today is going to be a very key day in negotiations," a financial industry source said, speaking anonymously because the banks' discussions with regulators are not public. "Things are particularly tense."

U.S. officials are expected to brief banks on Tuesday on the results and on how they will be publicly unveiled.

A source familiar with the plans said the final results will come in a 150-page report on Thursday, and Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner will present the findings.