Abstract for: Dynamics of banking soundness based on CAMELS rating system
The banking system is one of the most important economic sectors in Iran that has the most relation with the country's macroeconomics; therefore, any kind of volatility and instability in it can influence the country's macroeconomics. Therefore, assessing the performance of the country's banking industry and analyzing the bank soundness is essential. One of the most conventional methods to analyze and evaluate the bank soundness is using the CAMELS rating system which consists of six dimensions to measure the performance of the bank. Each of these dimensions has many components, and together with the variables that influence them and the interactions between them constitute a complex economic and monetary system. In this study, using the qualitative system dynamics approach, a systemic analysis of the structure of this issue is provided. The results show that the factors, Capital Adequacy, Quality Management and Asset Quality are the most important issues of Iranian banks in banking soundness management, and developing these three factors is the way out of the problems.