US Agencies (FDIC and FED) are seeking information and comments from interested parties regarding the consistency of ratings assigned by the agencies under the Uniform Financial Institutions Rating System (UFIRS). The assigned ratings are commonly known as CAMELS ratings. The agencies are also interested in receiving feedback about the use of CAMELS ratings in their bank application and enforcement action processes. Comments must be received within 60 days after date of publication in Federal Register.
CAMELS rating system is an acronym of the six evaluation components—Capital, Asset Quality, Management, Earnings, Liquidity, and Sensitivity to market risk. In addition, the CAMELS rating system contains an overall composite rating. The agencies are issuing this request to seek public input on how CAMELS ratings are assigned to supervised institutions and the implications of such ratings in the application and enforcement action processes. This effort to seek comments and information is consistent with the agencies’ commitment to increase transparency, improve efficiency, support innovation, and provide opportunities for public feedback. This request for information is not a proposal to modify the CAMELS rating definitions. Such definitions were issued through FFIEC. The agencies encourage comments from interested members of the public, including, but not limited to, insured depository institutions, other financial institutions or companies, individual depositors, and consumers, consumer groups, trade associations, and other members of the financial services industry.
The US Agencies typically communicate the CAMELS ratings to an institution through a formal, written report of examination or other official agency correspondence. The CAMELS ratings and the report of examination or other official agency correspondence are property of the agencies and are provided to the institution’s board of directors and management for their confidential use. Given the confidentiality requirements applicable to financial institutions’ CAMELS ratings and other report of examination findings and conclusions, the agencies realize that there are limitations on responses regarding the consistency of how CAMELS ratings are assigned. The agencies, however, welcome general comments that do not breach these confidentiality requirements.
Comment Due Date: FR+60 Days
Keywords: Americas, US, Banking, CAMELS Rating, Market Risk, UFIRS, FDIC, FED, US Agencies
Previous ArticleFSB Outlines Work to Consider Regulatory Issues of Stablecoins
EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.
In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.
IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.
FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.
EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.
FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.
RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.
The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.
HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.
ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).