 Well-managed and well-capitalized
banks and savings associations with up to $500
million in total assets and CAMELS ratings of 1
or 2 may qualify for the extended 18-month
on-site examination cycle (instead of the
12-month cycle) under final regulations issued
by the major federal bank and thrift regulators.
The rules also clarify when an institution is
considered “well-managed.” “CAMELS” stands
for the six factors the system uses to rate
financial institutions: capital adequacy,
asset quality, management quality, earnings,
liquidity and sensitivity to market risk.
The rules, issued by the Federal Reserve,
FDIC, Office of the Comptroller of the
Currency, and Office of Thrift Supervision,
went into effect Sept. 25. The full
text of the rules is available at http://edocket.access.gpo.gov/2007/pdf/07-4716.pdf
. In a separate announcement, the
National Credit Union Administration, working
with the National Association of State Credit
Union Supervisors, is discussing the possible
elimination of its CAMEL Matrix. The NCUA will
continue to use CAMEL as an internal rating
system. The review is limited to the Matrix, a
system of static ratio benchmarks, which has
been an optional examiner tool since 1995.
Federal bank and thrift
regulators reported that Shared National
Credits (SNC) grew by 21% from 2006, the
fastest pace since 1998. The 2007 SNC
portfolio included 7,686 credits totaling $2.3
trillion, a $401 billion increase over 2006.
The large increase was attributed, in
part, to brisk merger and acquisition lending.
The SNC Program, which was established
in 1977, seeks to provide an efficient and
consistent review and classification of large
syndicated loans. It generally covers loans or
loan commitments of at least $20 million that
are shared by three or more regulated
financial institutions. Total
criticized credits—which include credits
classified as substandard, doubtful and
loss—increased as well, but the rate of
criticized credits fell to 5% from 5.1% the
previous year. The report was issued
by the Federal Reserve, FDIC, Office of the
Comptroller of the Currency, and Office of
Thrift Supervision. The full report is
available at www.fdic.gov/
news/news/press/2007/pr07080.html. |
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