General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
January 09, 2018

Carolyn Rogers of OSFI discussed the lessons of Basel III and the path ahead for Canada while addressing the audience at the 2018 RBC Capital Markets Canadian Bank CEO Conference in Toronto. She summarized the lessons learned from finalizing Basel III and explained how OSFI will take these lessons and the final reforms forward.

The first lesson, according to her, is that supervision is critical to any strong regulatory regime; rules only get you so far. The second lesson is that delays will eventually catch up to you while the third lesson is that all standards have their limits and their usefulness can deteriorate over time; domestic context and ongoing evaluation is critical. She added that OSFI will take these lessons forward by making the capital buffers more usable. To date, OSFI has not activated the Countercyclical Capital Buffer (CCyB) in Canada. However, this year, the plan is to make adjustments to the capital regime to increase transparency and this may take the form of a modified version of CCyB, or simply greater transparency on Pillar 2 buffers. OSFI is still considering options and is consulting with stakeholders. Its objective is not to add capital but rather to increase the likelihood that the capital that is already there will be drawn on as intended in case of a stressed event in the future.

Ms. Rogers also discussed the need to update standards and highlighted the first step being taken in implementing the final chapter of Basel III in Canada. That step is to replace the current capital output floor with the more risk-sensitive Basel II floor, calibrated at 75%. Details of the changes will be published on the OSFI website shortly; the transition will begin next quarter and end in the fourth quarter of this year. The OSFI focus will be on mapping the rest of the transition plan to bring the final set of Basel III reforms into Canada. She added that the following can be expected from OSFI in the year ahead:

  • Changes to the transparency of the capital regime focused on improving the usability of capital buffers
  • An updated, more risk-sensitive capital output floor that will bridge to the Basel III output floor
  • A start to consultations on the final round of Basel III reforms, guided by lessons learned about building a capital regime that is credible and contributes to the safety and soundness of Canadian banks


Related Link: Speech

Keywords: Americas, Canada, Banking, Basel III, Output Floor, CCyB, Pillar 2, OSFI

Related Insights
News

FSB Report Examines Financial Stability Implications of Fintech

FSB published a report that assesses fintech-related market developments and their potential implications for financial stability.

February 14, 2019 WebPage Regulatory News
News

US Agencies Amend Regulatory Capital Rule to Allow Phase-In for CECL

US Agencies (FDIC, FED, and OCC) adopted the final rule to address changes to credit loss accounting under the U.S. generally accepted accounting principles; this includes banking organizations’ implementation of the current expected credit losses (CECL) methodology.

February 14, 2019 WebPage Regulatory News
News

OCC Consults on Company-Run Stress Test Requirements for Banks

OCC proposed amendments to its company-run stress testing requirements for national banks and Federal savings associations, consistent with section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

February 12, 2019 WebPage Regulatory News
News

CFTC Extends Comment Periods for Trade Execution Requirement Proposals

CFTC announced that it is extending comment period for the proposed amendments related to the regulations on swap execution facilities (SEF) and trade execution requirement.

February 12, 2019 WebPage Regulatory News
News

OCC Proposes to Renew Information Collection Under Stress Test Rule

OCC is proposing to renew its information collection titled “Annual Stress Test Rule” (OMB Control No: 1557-0311). Comments must be received on or before March 13, 2019.

February 11, 2019 WebPage Regulatory News
News

OSFI Consults on NSFR Disclosure Requirements for D-SIBs

OSFI proposed the draft guideline on the net stable funding ratio (NSFR) disclosure requirements for domestic systemically important banks (D-SIBs).

February 11, 2019 WebPage Regulatory News
News

EC Amends Its Regulation to Clarify Impairment Requirements for IFRS 9

EC published the EU Regulation 2019/237 that amends Regulation (EC) No 1126/2008 adopting certain international accounting standards, in accordance with Regulation (EC) No 1606/2002 regarding International Accounting Standard (IAS) 28 on Investments in Associates and Joint Ventures.

February 11, 2019 WebPage Regulatory News
News

FSB Chair Randal Quarles Speaks About the Upcoming Work of FSB

While speaking at the BIS Special Governors Meeting in Hong Kong, Randal K. Quarles, the Chair of FSB and Vice Chair of FED, discussed his views on how the work of FSB must evolve and the key principles that, he believes, should inform that work.

February 10, 2019 WebPage Regulatory News
News

OSFI Proposes to Amend the Liquidity Adequacy Requirements for Banks

OSFI proposed revisions to the Liquidity Adequacy Requirements (LAR) Guideline for banks. OSFI published the proposed drafts (with proposed changes highlighted in yellow) of Chapters 1,2, 4, and 5 of the LAR guideline.

February 08, 2019 WebPage Regulatory News
News

HKMA Publishes FAQs on Local Implementation of IRRBB Framework

HKMA published the frequently asked questions (FAQs) related to the local implementation of the interest rate risk in the banking book (IRRBB).

February 08, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2593