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LONDON (Reuters) - Europe's banks are not identifying enough staff as key risk-takers, undermining efforts by regulators to improve pay practices and reduce the threat of another crisis, the industry's watchdog said.

The European Banking Authority (EBA) said a survey of banks in 21 countries to assess how new regulations to develop risk-based remuneration practices aimed at cutting out short-term incentives showed "some areas of concern" remained.

There were big inconsistencies in how banks and supervisors judged if employees had a material impact on the risk profile of their bank, or "identified staff", it said.

"The numbers of identified staff differ considerably between member states, but there is a clear tendency of institutions to select very low numbers," the EBA said in a summary of its survey on Thursday. "This ... undermines the effectiveness of EU supervisory reforms on remuneration."

It said the differences could lead to regulatory arbitrage and competitive disadvantages.

"Further supervisory guidance is needed in setting up the criteria for identifying risk takers," it said.

Regulators and watchdogs like the EBA are trying to change pay practices that led to excessive risk-taking and are blamed for adding to the 2007/08 financial crisis.

The EBA set out new pay guidelines in December 2010.

Progress has been made on the performance measurement of employees and in parameters used for setting bonus pools, but the use of risk-adjusted parameters and discretionary judgment need to be more transparent, the survey found.

Improvements are also needed in setting clawbacks of pay if a problem occurs in the future, it said.

Only a few states had introduced caps for how big a bonus could be paid as a percentage of fixed salary, and the tools to measure this appear basic and the ratio still appeared to be high, the EBA said.

Variable pay averaged about 122 percent of fixed pay for executives and was 139 percent for other identified staff, the survey showed. But the highest ratio in a member state was 429 percent for executives and 940 percent for the other identified staff.

The EBA will later this year report on trends for bankers earning 1 million euros or more and on remuneration by business area, as part of its increased scrutiny on pay.

(Reporting by Steve Slater and Sarah White; Editing by Mark Potter)