CAMELS is an acronym for the six components of the rating system that examiners evaluate and take into account when assigning an overall composite rating: capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk. See Board of Governors of the Federal Reserve System (1996), Supervision and Regulation Letter 96-38, “Uniform Financial Institutions Rating System,” December 27.
The conclusion drawn by the Riksbank is that various indicators must be followed systematically with the aim of detecting any signs of potential financial problems and systemic risks. - In Sweden’s case the supervisory authority was not prepared for the new environment that emerged after credit market deregulation.