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:: Volume 26, Issue 85 (quartery journal of Economic Research and Policies 2018) ::
3 2018, 26(85): 7-31 Back to browse issues page
Design of a Rating System in Banking Supervision in the Banking Network: CAMELS Approach
Abstract:   (584 Views)

Innovations and deregulations in the banking sector have led to bank’s operation tends to be more complicated and riskier than what it was in the past. This has created some challenges in supervision on banking performance. To overcome these challenges, the supervisors use new methods and instruments which CAMELS rating system is one of them. In this paper, by applying CAMELS, the supervisory rating system is designed for Iranian banking network. For this purpose, the banks’ financial statements are used for the period of 1385-1394. In addition to the supervisory rating for each bank, this paper addresses the most important factors that affect the rating. The results show that the CAMELS rating system can give an accurate and consistent bank rating that is respect to the bank's financial condition and performance. This can identify the risks and risky banks. So it can help to reduce effects of unexpected shocks and improve the resource allocation. According to the results, the central bank should offer some recommendations and tips to control and manage the risks of risky banks. Also, the central bank should decide about restructuring, merging or liquidate of risky banks.
 
 
 

Keywords: Supervision rating, CAMELS, Risk management
Full-Text [PDF 1001 kb]   (501 Downloads)    
Type of Study: Research | Subject: Special
Received: 2016/11/5 | Accepted: 2018/05/16 | Published: 2018/05/16
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Design of a Rating System in Banking Supervision in the Banking Network: CAMELS Approach . 3. 2018; 26 (85) :7-31
URL: http://qjerp.ir/article-1-1610-en.html


Volume 26, Issue 85 (quartery journal of Economic Research and Policies 2018) Back to browse issues page
فصلنامه پژوهشها و سیاستهای اقتصادی Journal of Economic Research and Policies
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