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Basel says how banks add up risks may need reform

LONDON (Reuters) - Global regulators said on Friday the way in which banks add up risks on their main books to determine capital levels varies considerably and changes may be needed.

Policymakers say that until investors have faith in the numbers banks come up with to determine their capital holdings, trust won't be restored to the sector tarnished by the financial crisis.

The Basel Committee of banking supervisors from top financial centers said its study of how risks on 100 banking books are calculated showed considerable variation.

Such differences could result in the reported capital ratios for some outlier banks varying by as much as 2 percentage points, it said.

"While some variation in risk weightings should be expected with internal model-based approaches, the considerable variation observed warrants further attention," Basel Committee Chairman Stefan Ingves said.

(Reporting by Huw Jones, editing by Clare Hutchison)