Canada

Topic: Capital adequacy

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OSFI proposes changes to the Liquidity Adequacy Requirements

The Office of the Superintendent of Financial Institutions (OSFI) has issued proposed revisions (the Revisions) to certain chapters of the Liquidity Adequacy Requirements (LAR) guidelines. The LAR set out the framework that Canadian deposit-taking institutions (DTIs) must follow to mitigate the risk of a stressed environment leading to insufficient liquidity. The Revisions are a response … Continue Reading

OSFI issues final versions of the capital adequacy requirements and the leverage requirements guidelines

The Office of the Superintendent of Financial Institutions (OSFI) has issued its final version of the Capital Adequacy Requirements (CAR) guideline and Leverage Requirements (LR) guideline. OSFI updates its CAR guideline periodically to ensure capital requirements reflect the underlying risks and developments in the financial industry. The LR guideline supplements this by setting out the … Continue Reading

OSFI issues final corporate governance guidelines

The Office of the Superintendent of Financial Institutions (OSFI) has issued its final version of the Corporate Governance Guideline (CGG). The CGG sets out OSFI’s expectations for boards of directors of federally regulated financial institutions (FRFIs). The CGG applies to all FRFIs other than the Canadian branch operations of foreign banks and insurance companies. The … Continue Reading

CSA confirms position on bail-in implications

The Canadian Securities Administrators (CSA) recently released two notices on the implementation and regulation of the Canadian bail-in regime, namely: CSA Staff Notice 46-309, in connection with the regulation of Bail-in Debt (as defined below); and CSA Staff Notice 81-331, in connection with the implications of the bail-in regime on investment fund issuers, subject to … Continue Reading

OSFI proposes changes to the leverage requirements guideline

The Office of the Superintendent of Financial Institutions (OSFI) has released proposed revisions to the Leverage Requirements (LR) guideline in order to align with upcoming modifications to Chapter 4 (Settlement and Counterparty Risk) and Chapter 7 (Securitization) of the Capital Adequacy Requirements (CAR) guideline. The LR set out the framework for the leverage ratio, which … Continue Reading

Implementation of the final Basel III reforms in Canada – request for comments

The Office of the Superintendent of Financial Institutions (OSFI) has released a discussion paper on the proposed implementation of the final Basel III reforms in Canada. The reforms were published in December 2017 and, in summary, seek to: Enhance credibility in the calculation of risk-weighted assets. Improve the comparability and transparency of banks’ capital ratios. … Continue Reading

OSFI confirms higher capital for Domestic Systemically Important Banks

The Office of the Superintendent of Financial Institutions (OSFI) has provided greater transparency to the market surrounding the Domestic Stability Buffer (the DSB) currently held by Domestic Systemically Important Banks (D-SIBs) in a bid to guard against Pillar 2 risks associated with systemic vulnerabilities.  OSFI revealed last week that D-SIBs must hold an extra cushion, … Continue Reading

TLAC – OSFI issues final disclosure guidelines

Last week, the Office of the Superintendent of Financial Institutions (OSFI) issued its final guideline on total loss absorbing capacity (TLAC) disclosure requirements for Canadian domestic systemically-important banks (D-SIBs). The new guideline sets out the format, timing and location of the TLAC disclosure requirements, among other things. The new guideline further requires that D-SIBs begin … Continue Reading

OSFI issues strong reminder on mortgage lending practices

The high-paced growth of residential home prices, particularly in the Vancouver and Toronto markets, is continuing to generate concern both from the Bank of Canada and the Office of the Superintendent of Financial Institutions (OSFI). In its semi-annual Financial System Review, released on June 6th, the Bank noted that the vulnerability of the financial sector … Continue Reading

New restrictions announced for residential mortgages

The Canadian government continues to be concerned with the escalation in house prices in Canada, particularly in Toronto and Vancouver.  While the government will not say that it considers these markets to be overvalued, clearly, there is concern that the extended period of low interest rates has caused homeowners to be overextended.  On December 11th, … Continue Reading

OSFI Finalizes New Liquidity Test for Banks

On October 31st, the Office of the Superintendent of Financial Institutions (OSFI) released the final version of its new Leverage Requirements Guideline.  The Guideline is based on the BCBS publication Basel III Leverage Ratio Framework and Disclosure Requirements and implements the Basel leverage ratio requirement for Canadian banks and federally regulated deposit-taking institutions.  Unlike the … Continue Reading

Canada publishes consultation on bail-in regime

The Canadian government recently published for comment a consultation paper on a proposed bail-in regime applicable to Canada’s domestic systemically important banks (D-SIBs). The bail-in regime, formally referred to as a Taxpayer Protection and Bank Recapitalization Regime, would grant to the Government of Canada the power to permanently convert “eligible liabilities” of the D-SIB into … Continue Reading
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