CAMELS Rating System
An international bank-rating system where bank supervisory authorities rate institutions according to six factors.
The six factors are represented by the acronym "CAMELS." Investopedia Says:
The six factors examined are as follows:
C - Capital adequacy
A - Asset quality
M - Management quality
E - Earnings
L - Liquidity
S - Sensitivity to Market Risk
Bank supervisory authorities assign each bank a score on a scale of one (best) to five (worst) for each factor. If a bank has an average score less than two it is considered to be a high-quality institution, while banks with scores greater than three are considered to be less-than-satisfactory establishments. The system helps the supervisory authority identify banks that are in need of attention. Related Terms:
Asset Quality Rating
Bank
Liquidity
Market Risk
Quality of Earnings |