The Liquidity Component of the CAMELS Rating Refers to

question 6

Multiple Choice

The liquidity component of the CAMELS rating refers to

• A) how a bank's earnings would change if economic conditions change.
• B) how readily a bank's management would detect its financial problems.
• C) a bank's sensitivity to financial market conditions.
• D) the type of loans that a bank provides, the bank's process for deciding whether to provide loans, and the credit rating of debt securities that it purchases.
• E) whether a bank frequently needs to borrow from outside sources, such as the discount window.