Flashcards in BHC rating System lesson Deck (10):
R - risk management
Competence of board and senior management oversight
Policies, procedures, and limits
Risk monitoring and management information systems
F - financial condition
I - Impact
Impact of the parent company and nondepository subsidiaries (collectively referred to as nondepository entities) on the subsidiary depository institutions
Composite - single digit rating given to bank subsidiary after CAMELS
For noncomplex institutions with consolidated assets of $1 billion or less, only the "R" component and "C" composite are assessed.
The "R" represents the primary regulator's assessment of management-"M" from the CAMELS rating, and the "C" reflects the primary regulator's composite rating of the bank subsidiary.
D - depository institutions
this rating will generally reflect the primary regulator's assessment
last digit composite rating after CAMELS
the condition of the BHC’s
Other nonbank subsidiaries
Given the CAMELS rating 223122/2, which answer would most likely reflect the "D" component rating for a BHC with consolidated assets greater than $1 billion, but only one bank subsidiary?
2- The "D" component is driven by the composite rating from the most recent subsidiary bank examination provided by the bank's primary regulator.
for Impact of nondepository entities on the depository subsidiary(ies)
A parent company's risk management and financial issues may directly affect the depository subsidiary and
A non-bank entity's risk management and financial issues may directly affect the depository subsidiary or indirectly affect the depository subsidiary through its impact on the parent company.