CAMELS Model and its Impact on the Evaluation of Banking Performance A LITERATURE REVIEW

Abstract

The study aimed at identifying the CAMELS model in evaluating the performance of banks and attempting to reveal the strengths and weaknesses that banks endure in order to reach at the level of raising the effectiveness and efficiency of the performance of banking work according to modern performance evaluation models. This is achieved by analyzing the previous study from (2010) until now, focusing on previous studies in the Arab world and Iraq. The CAMELS system is considered one of the most important classification systems used by the supervisory bodies in the world to assess the safety of the performance of banks. The study concluded that the use of the CAMELS model leads to shortening the inspection time by focusing on six main items and not dispersing efforts in examining items that are unnecessary or affecting the integrity of the financial position. It helps to implement the principle of transparency and disclosure and to make information available to market customers andthe public. In order to achieve the goal of comprehensive supervision with a high degree of efficiency, more openness should be made to global developments and follow-up, especially those related to the financial analysis of banks, especially specialized systems such as the CAMELS system or other global systems that lead to benefiting from the experiences of the world's countries in advanced banks. Therefore, work must be done to develop the main elements, and to introduce new equations and ratios that lead to enhancing the rates and ratios used in order to reach more accurate results about the elements used in the model.