FINANCIAL MARKETS+INST.-(LL)W/ACCESS
FINANCIAL MARKETS+INST.-(LL)W/ACCESS
7th Edition
ISBN: 9781265567880
Author: SAUNDERS
Publisher: MCG CUSTOM
Question
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Chapter 12, Problem 1DYU
Summary Introduction

To discuss: DI’s CAMELS rating are used to measure.

Expert Solution & Answer
Check Mark

Explanation of Solution

CAMELS rating is a decision making rating system which categorizes the whole state of a bank. It is break in to the following parts.

C - Capital adequacy

A - Assets

M- Management capability

E - Earnings

L - Liquidity management

S - Sensitivity market risk.

Each financial institution is assigned to the composite rating based on the evaluation and rating of six main essential constituents of institution’s financial condition and operations that are summarized during a composite CAMEL rating.

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