European banks are under pressure to standardise how they measure their riskiness as investors grow increasingly wary of the kaleidoscope of methods used.
The variety of approaches covering critical matters such as when a loan becomes impaired and defining what is suspect directly affects how much capital banks must hold and the sort of returns investors can expect.
Efforts to harmonise reporting standards have been going on for nearly a decade, but the financial crisis has brought the issue to a head as investors, burned by tumbling share prices and emergency cash calls, are steering clear of those lenders whose risk models they don't trust.
"This lack of comparability does in our view weigh on the investibility of some banks," said Jon Peace, a London-based banking analyst with Nomura.
"Where transparency is too low to form a clear view on the accuracy of the calculations, investors will be inclined to discount the shares for the uncertainty, whether or not it is warranted.
" Other analysts, who will only speak anonymously because of the sensitivity of the topic, are more blunt, with one describing financial statements as "pointless", given the lack of consistency across banks and the discretion they have on key metrics.
COMPARING APPLES WITH APPLES
The treatment of mortgage arrears is particularly diverse.
As a general rule, home loans are defined as being in arrears if the repayments are more than 90 days overdue, but it varies widely across Europe.
In Portugal, a home loan is overdue when just one month's payment is missed.
In Italy, it is one or two months.
At the other end of the spectrum, Denmark's arrears clock only starts ticking three and a half months after the last payment was made.
In Italy, IntesaSanpaolo was so concerned that comparisons with non-Italian banks would lead to "flawed conclusions" that it incorporated an international comparison into its last results presentation.
Under the method selected for that presentation, Spanish banks' bad loans would triple to a quarter of total loans.
The comparable figure for Italian banks was 9.9 percent.
"We see that in an apple-for-apple comparison, the Spanish figures would triple and would be 2.
5 times higher than the Italian ratio," Chief Executive Enrico Cucchiani said.
"Italian asset quality is significantly underappreciated, and we also see that there is a clear need for greater harmonisation and transparency."
'Doubtful' loans are another minefield.
Some countries use payment history as the sole determinant, while others use more subjective clauses; in Spain and Portugal, for example,