Division of Supervision and Consumer Protection's Assessment of Bank Management - Table 1 Description
September 8, 2004
Audit Report No. 04-033
Table 1: CAMELS Component Rating Equals the CAMELS Composite Rating
According to the Manual of Examination Policies, issued by the FDIC's Division of Supervision and Consumer Protection, a composite rating is based on a careful evaluation of an institution's managerial, operational, financial, and compliance performance. The six key components used to assess an institution's financial condition and operations are: Capital adequacy, Asset quality, Management capability, Earnings quantity and quality, adequacy of Liquidity, and Sensitivity to Market Risk, which together form the CAMELS rating.
CAMELS is an acronym for Capital, Assets, Management, Earnings, Liquidity, and Sensitivity. Table 1 lists the six CAMELS components and the frequency with which each component matched the CAMELS composite rating as follows:
- Capital: 72%
- Assets: 72%
- Management: 86%
- Earnings: 64%
- Liquidity: 63%
- Sensitivity: 70%
Note: The component "management" and its frequency of matching the composite rating are emphasized in this table.
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