DEFINITION of 'Bank Examination' An assessment of the security and soundness of a bank. The essential concentration is an examination of the banks resources and liabilities, however the exam additionally ordinarily incorporates a survey of its adherence to controls and guidelines, its consistence with different laws -, for example, truth-in-loaning - and an examination of its electronic information handling frameworks. Bank examinations for national banks are directed by the representative of the coin, state contracted banks by the Federal Deposit Insurance Corporation (FDIC) or the state saving money office, and bank holding organizations by the Federal Reserve Board. Separating 'Bank Examination' In assessing the security and soundness of an establishment, analysts take after the CAMELS framework: Capital ampleness, Asset quality, Management, Earnings, Liquidity and Sensitivity (to systemic hazard). Banks are positioned on a size of one to five in every class, and get a general appraisal, with one being the most grounded and five the weakest. Saves money with CAMELS of four and five are conventionally put on a watch list and observed nearly.