A revised regulatory ratings system for banks and credit unions will be available for public comment for 90 days, the regulators said late Wednesday as the proposed new scheme was unveiled.
The ratings regiment – used by all federal financial institution regulators – is known as the CAMELS system. That stands for capital, assets, management, earnings, liquidity and sensitivity.
According to the Federal Financial Institutions Examination Council (FFIEC), the umbrella group for the regulators which proposed the changes, the comprehensive revisions are the first for the system in 30 years.
Michelle Bowman, chair of the FFIEC and vice chair for supervision at the Federal Reserve, said the changes mark “a decisive shift toward transparency, quantitative factors, and predictability of supervisory oversight.”
According to the regulators, the revisions will focus ratings on material financial risks, which they said strengthen the link between CAMELS ratings and bank and credit union safety and soundness. The new system would “retain the basic framework of the existing rating system, with certain modifications to the composite and component rating definitions and evaluation factors,” they said.
Agencies Request Comment on Financial Institutions Rating System
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