CAMEL Rating System. An internationally recognised framework for assessing the Capital adequacy, Asset quality, Management, Earnings and Liquidity of banks. The primary purpose of CAMEL is to help identify institutions whose weaknesses require special supervisory attention. The overall rating is...

In recent years, policymakers in the Basel countries have begun exploring strategies for harnessing financial markets to contain bank risk. As part of this effort, we measure the potential contribution of jumbo CD yields and runoff (withdrawals) to off-site surveillance. Specifically, we rank...

We examine the value of jumbo certificate-of-deposit (CD) signals in bank surveillance. To do so, we first construct proxies for default premiums and deposit runoffs and then rank banks based on these risk proxies. Next, we rank banks based on the output of a logit model typical of the...

The diagnosis on banks is comforting, despite a few weak spots here and there and an economy that's slowing down.

Off-site surveillance involves using financial ratios to identify banks likely to develop safety-and-soundness problems. Bank supervisors use two tools to flag developing problems: supervisory screens and econometric models. Despite the statistical dominance of models, supervisors continue to...

Risky behavior by banks is kept in check primarily with two tools: examinations and the rule that requires owners to keep a certain amount of their own money invested in their banks. Some people now want to tap the markets for further assistance with bank supervision.