The CAMELS rating system is an international bank-rating system where bank supervisory authorities rate institutions according to six factors.
The six
factors are represented by the acronym "CAMELS."
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.