The CAMELS ratings or Camels rating is a supervisory rating of the bank's overall condition used to classify them in different categories. This rating is based on financial statements of the bank and on-site examination. The scale is from 1 to 5. Here 1 indicates strongest and 5 being weakest. These ratings with 1 eased to the public but only to the top management of the banking company to prevent a bank run on a bank which has a bad CAMELS rating.
Components
The components of a bank's
condition that are assessed:
§ (C) Capital adequacy,
§ (A) Asset
quality,
§ (M) Management
Efficiency,
§ (E) Earnings,
§ (L) Liquidity and
§ (S) Sensitivity to market
risk