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:
The discussion paper sets out OSFI’s proposed policy direction and timelines for implementing the final Basel III reforms. The implementation of the final Basel III reforms into the domestic capital framework will apply to all deposit-taking institutions. However, OSFI plans to propose future changes to the domestic capital framework just to ensure the requirements are reflective of the risks faced by institutions that do not use internal models for regulatory capital purposes.
OSFI is now seeking views on the discussion paper from interested stakeholders and has invited comments on all sections of the discussion paper.
In particular, OSFI is seeking responses to the following specific questions by October 19, 2018 (per section v of the discussion paper):
Question 1: Are there other areas of the framework OSFI should consider for domestic modifications?
Question 2: What are your views on the areas OSFI has highlighted for possible domestic modifications?
Question 3: What are your views on the identification, collection and governance of loss data under the new standardized approach to operational risk?
Question 4: Which tools or processes under the existing approaches to measuring operational risk capital should be retained?