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CAMELS Rating System and Forecasting the Financial Failure in the Turkish Commercial Banking Sector

Author

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  • Murat Çinko
  • Emin Avci

Abstract

Banking supervisory agencies around the world have been utilizing CAMELS rating system (or variants) for many years. In this study, financial ratios were used to calculate representative CAMELS ratings and components for 1996 - 2000. The financial ratios, which were used to calculate the CAMELS components, were utilized to predict the transfer of commercial banks in 2001 to the SDIF by the use of discriminant analysis, logistic regression and neural network models. Findings of the study presented that it was not possible to predict the transfer of a bank to SDIF by the use of CAMELS ratios

Suggested Citation

  • Murat Çinko & Emin Avci, 2008. "CAMELS Rating System and Forecasting the Financial Failure in the Turkish Commercial Banking Sector," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 2(2), pages 25-48.
  • Handle: RePEc:bdd:journl:v:2:y:2008:i:2:p:25-48
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    File URL: http://www.bddk.org.tr/WebSitesi/turkce/Raporlar/BDDK_Dergi/6079makale%202.pdf
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    More about this item

    Keywords

    CAMELS; Financial Failure Prediction;

    JEL classification:

    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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