Fitch Calls for Clarity on Bank Books

The current financial turmoil will translate into banks' profits rising more slowly and into fewer buybacks, while disclosure rules need to be tightened, Gordon Scott, managing director of financial institutions at Fitch Ratings, told "Squawk Box Europe."

"I think you'll probably see less buybacks, profitability I think it's going to slow… but in general the banks are in pretty good shape in terms of the levels of capital," he said.

Fitch Ratings has started to assess the impact of the crisis on the European banks that it rates and Scott said they needed to be more transparent. But he stopped short of saying new regulations were needed.

"The level of disclosure in many banks is actually not that good … I'd favor the disclosure road rather than tell banks 'don't do that,'" he said.

Uncertainty over banks' off balance sheet performance has added to the seizing of interbank lending market as suspicion encourages firms to hold on to liquid assets and refrain from standard lending practices.

"There is a transparency issue … they are just not sure where problems are, so rather than getting involved, they hold back," said Scott. "A little bit more transparency from everybody would be helpful."