CAMELS Rating System


DEFINITION of '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."


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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.

  1. Liquidity

    The degree to which an asset or security can be quickly bought ...
  2. Bank Examination

    An evaluation of the safety and soundness of a bank. The primary ...
  3. Bank Rating

    Ratings provided to the public by the Federal Deposit Insurance ...
  4. Quality Of Earnings

    The amount of earnings attributable to higher sales or lower ...
  5. Bank

    A financial institution licensed as a receiver of deposits. There ...
  6. Market Risk

    The possibility for an investor to experience losses due to factors ...
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