bank rating

Popular Terms
A rating of the safety and soundness of a bank, in terms of a formula developed by the Federal Deposit Insurance Corporation (FDIC). The FDIC rates banks on a scale of 1 to 5. Ratings of 1 and 2 indicate that a bank is sound. Ratings of 4 and 5 indicate that a bank has serious problems. A rating of 5 is assigned to banks that have a high probability of failing within the next 12 months.

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