Bank Examination
Barron's Banking Dictionary:
Top
Bank Examination
Periodic review of a bank's balance sheet assets and liabilities by chartering agency or bank supervisory agency. Bank examiners focus their attention on three main areas: the competence of bank management; the quality of bank assets, principally loans; and compliance with state or federal banking regulations. Today, examiners also look closely at Off-Balance Sheet liabilities such as loan commitments or guarantees, which are contingent claims on the bank's assets.
Supervisory examinations are carried out by federal, state, and independent agencies. National banks are examined by the Comptroller of the Currency, state chartered banks by the Federal Deposit Insurance Corporation or the state banking department, and bank holding companies by the Federal Reserve Board. Savings and loan associations are examined by the Office of Thrift Supervision, savings banks and credit unions by state banking departments. See also Compliance Examination.
Related Videos:
Top
Bank Examination
Investopedia Financial Dictionary:
Top
Bank Examination
An evaluation of the safety and soundness of a bank. The primary focus is an examination of the banks assets and liabilities, but the exam also commonly includes a review of its adherence to regulations and standards, its compliance with various laws - such as truth-in-lending - and an examination of its electronic data processing systems.
Bank examinations for national banks are conducted by the comptroller of the currency, state chartered banks by the Federal Deposit Insurance Corporation (FDIC) or the state banking department, and bank holding companies by the Federal Reserve Board.
Investopedia Says:
In evaluating the safety and soundness of an institution, examiners follow the CAMELS system: Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity (to systemic risk). Banks are ranked on a scale of one to five in each category, and receive an overall assessment, with one being the strongest and five the weakest. Banks with CAMELS of four and five are ordinarily placed on a watch list and monitored closely.
Related Links:
Find out how these government agencies govern the financial markets. Financial Regulators: Who They Are And What They Do
Find out how the Tier 1 capital ratio can be used to tell if your bank is going under. Is Your Bank On Its Way Down?
Learn how to determine if your assets are safe or if your bank has spread itself too thin. Assessing Bank Assets: Are Your Savings Safe?
The Public-Private Investment Progam is part of the government's effort to fix the failing financial sector. But is it a good investment? Should You Buy Banks' "Toxic" Assets?
Post a question - any question - to the WikiAnswers community:
Copyrights:
Barron's Banking Dictionary
Dictionary of Banking Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.
Read more
Mentioned in
Compliance Examination
(in banking)
Primary Regulator
(in banking)
General Examination
(in banking)
Member Bank
(in banking)
Bank
(in banking)
» More