US regulators unveiled a proposal to overhaul how examiners secretly rate banks, a move likely to be cheered by lenders who have long griped about the process.
The plan, released on Tuesday, would reshape the framework known as CAMELS that examiners use to grade banks on capital adequacy, asset quality, management, earnings, liquidity and sensitivity to market risk. Those grades create an overall rating that determines the degree of scrutiny a financial institution faces, the activities it can engage in and how much capital it has to hold.
The proposal would “strengthen the link between CAMELS ratings and a financial ...