WASHINGTON — International banking regulators proposed sweeping revisions to the standards for assessing and capitalizing credit risk, calling for less reliance on external credit ratings and greater sensitivity and comparability of risks between banks.

The Basel Committee on Banking Supervision issued a consultative document Monday on standardized credit risk, which it will accept public comment on through March 27. The document outlines changes to the international standard credit risk framework — a standard that regulators may reference in lieu of a bank's approved internal modeling. The revised framework will supplant existing standard credit risk standards approved by the Basel Committee in 2006 as part of the Basel II accords.

The updated standards generally end the Basel II practice of weighting credit risk based on external rating agency estimates or sovereign incorporation, and instead favor standardized tables based on comparable inputs.

Bank exposures are weighted under the new standards according to a table that considers capital adequacy and asset quality. Corporate exposures will similarly be based on a standardized table weighing revenue and leverage. Preferential retail credit will also be more difficult to acquire under the new standards. Residential real estate risks will be weighed depending on the loan-to-value ratio and debt-service-coverage ratios.

The Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. issued a statement saying the agencies will review the consultative paper but did not indicate whether it will result in changes to the U.S. rules.

The regulators "will consider the proposals outlined in the consultative paper with the goal of developing a stronger and more transparent risk-based capital framework for the largest institutions," the agencies said in a joint release. "Any changes to the U.S. risk-based capital rules... would be considered in a manner consistent with the U.S. notice and comment process."

In recent months, the Basel committee has taken a number of steps to revise its international standards to rely less on external credit rating agencies and more on simple, standardized and transparent methods of calculating risk and capital to offset that risk. Earlier this month, the committee finalized rules relating to banks' capital needs for securitized assets, and in those rules similarly moved away from external credit rating agencies as a means of assessing those risks.

U.S. regulators have been among the strongest proponents of the move toward simpler, leverage-based capital rules and away from the use of credit rating agencies as a basis of assessing risk. The Fed and other regulators have frequently issued rules that are more stringent and require greater capital retention than those passed by the Basel committee.

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