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Informational Memorandum
Subject:OE Examination Manual Update
Date of Memorandum:05/28/1998
Expiration Date:
Office:OE
Signed By:Smith, Roland
FCA Contact Person:Holland, Tom
Contact Phone:703-883-4484
List of Attachments:Revised Section EM-135--Financial Institution Rating System

INFORMATIONAL MEMORANDUM




May 28, 1998


To: FCA Examination Manual Subscribers

From: Roland E. Smith, Chief Examiner /s/
Office of Examination

Subject: FCA Examination Manual Update


Attached is the revised Section EM-135 of the FCA Examination Manual (Manual) entitled Financial Institution Rating System (FIRS). This document reflects recent adoption of FIRS by the Farm Credit Administration (FCA) Board on April 9, 1998. The FIRS modifies the FCA Rating System (currently referred to as CAMEL) by adding a separate rating factor for sensitivity to market risk. This is referred to as the "S" component on CAMELS. Included in the revised section is a discussion of the sensitivity component and definitions for four new ratios that reflect interest rate risk sensitivities. Questions concerning revisions to EM-135 should be directed to either Jim Enzler or Greg Yowell at (703) 883-4483.

Please remove existing Section EM-135: FCA Rating System from your copy of the Manual and insert the revised section.

Attachment