BankerCollege

Background

Examiners look at numerous "assessment factors" for each component of your CAMELS rating, the foundation for every safety & soundness exam. This accounting webinar examines what management and the board must consider to be in compliance and to maintain safe and sound financial performance.

The initials stand for the six regulatory on-site examination components which are C-A-M-E-L-S:

• Capital Adequacy
• Asset Quality
• Management
• Earnings
• Liquidity
• Sensitivity to Market Risk

As most attendees are aware, in the US the regulatory framework is widespread. The Federal Financial Institutions Examination Council (FFIEC) is the umbrella body for the various regulators. The FFIEC consists of the: 

• Federal Reserve Bank (FRB) – Regulates the Bank Holding Companies
• Federal Deposit Insurance Corporation (FDIC) – Regulates insured Commercial Banks
• Office of the Comptroller of the Currency (OCC) – Regulates thrifts (savings banks, saving associations and savings and loans institutions)
• National Credit Union Association (NCUA) – Regulates Credit Unions

Implications for Bankers

Every FDIC-insured depository institution is subjected to rigorous examinations that follow the CAMELS system.

The results of CAMELS examinations are not made public. Each bank, after each examination, is assigned an overall CAMELS rating. For each component a rating is assigned after careful examination. The ratings are from “1” – the best rating to “5” – the worst rating. There is also an overall rating for the overall institution being examined by the regulator.

Webinar Objectives

This 90-minute accounting webinar reviews each of the components and exactly what are the concerns of the regulator when performing the on-site examination of each component.  Attendees obtain valuable insight about the CAMELS issues considered important from the regulator’s viewpoint.

The primary focus of the webinar is the “C” component where the regulator is interested in whether the institution has maintained and will be able to continue to maintain capital in relation to the nature and extent of risks (credit, market, interest-rate risk etc.). For the “C” component and the other components each webinar attendee receives valuable, actionable information for understanding, evaluating and acting on potential risks and compliance challenges.

Also, among other capital issues, regulators want to see if management has the ability to identify, measure, monitor and control the risks that could interfere with its capital requirements.

This accounting webinar allows attendees to focus on key areas of CAMELS considered important to the regulators. It also helps attendees prepare adequately for the inevitable on-site examination by one of the FFIEC regulatory bodies. It helps a bank stay off the list of “problem banks,” even if it is a large, profitable, well capitalized organization.