Chapter 14: Financial Institutions—Sector Overview

In this section

• Unique Aspects of Banks, Insurance, and Other FIs
  Explore the distinguishing features of banks, insurance firms, and specialized FIs, including their business models, risk profiles, and key ratios.
• CAMELS Framework Introduction
  Explore the CAMELS framework—a key supervisory tool for assessing a bank’s financial health and stability by examining Capital, Assets, Management, Earnings, Liquidity, and Sensitivity to market risk.
• Regulatory Capital Requirements and Solvency
  Explore essential banking and insurance capital requirements under frameworks like Basel III and Solvency II, focusing on risk-weighted assets, stress testing, and the buffers that safeguard financial institutions.
• Vignette Setup: Reading FI Footnotes
  Learn how to carefully analyze financial institution footnotes to uncover hidden exposures, track regulatory capital details, and interpret loan and insurance liabilities for better risk assessment.