Featured Product

    OSFI Revises Capital Requirements for Operational Risk for Banks

    July 18, 2019

    OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017. The new requirements are applicable to the deposit-taking institutions, including banks, bank holding companies, and federally regulated trust and loan companies. Institutions that are currently approved to use the Advanced Measurement Approach (AMA) will be required to use a revised Basel III Standardized Approach when the revised requirements are implemented in Canada in the first quarter of 2021.

    Consistent with Guideline E-21 on operational risk management, OSFI expects larger, more complex banks to continue using internal and external loss data and scenario analysis in their operational risk management frameworks. However, banks currently using the AMA approach will no longer be required to use Business Environment and Internal Control Factors in their operational risk management frameworks after the fourth quarter of 2019. To facilitate implementation of the revised operational risk capital requirements, OSFI will provide a transition period for deposit-taking institutions currently using the AMA for operational risk capital purposes. During the transition period, deposit-taking institutions currently approved to use AMA for capital reporting should report operational risk capital as follows:

    • For up to and including the fourth quarter of 2019, report using the AMA approach
    • From first quarter of 2020 to the fourth quarter of 2020, report using the current Standardized Approach outlined in Chapter 8 of the Capital Adequacy Requirements Guideline of OSFI
    • Starting from the first quarter of 2021, report using the revised Basel III Standardized Approach

     

    Related Links

    Keywords: Americas, Canada, Banking, Operational Risk, Advanced Approaches, Basel III, Regulatory Capital, Guideline E-21, OSFI

    Featured Experts
    Related Articles
    News

    EBA Analyzes Impact of Unwind Mechanism of Liquidity Coverage Ratio

    EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.

    November 19, 2020 WebPage Regulatory News
    News

    ECB Outlines Views on Possible Changes to AnaCredit Rule and TLTROs

    In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.

    November 19, 2020 WebPage Regulatory News
    News

    IASB Begins First Phase of Post-Implementation Review of IFRS 9

    IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Report Examines Progress in Resolvability of Systemic Institutions

    FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.

    November 18, 2020 WebPage Regulatory News
    News

    EBA Benchmarks National Insolvency Frameworks Across EU

    EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.

    November 18, 2020 WebPage Regulatory News
    News

    FSB Reports Assess Impact of Pandemic on Financial Stability

    FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.

    November 17, 2020 WebPage Regulatory News
    News

    RBNZ Consults on Implementation of Capital Review Changes

    RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.

    November 17, 2020 WebPage Regulatory News
    News

    IASB Announces Andreas Barckow as the New Chair from July 2021

    The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.

    November 17, 2020 WebPage Regulatory News
    News

    HKMA Consults on Capital Rules for Bank Equity Investments in Funds

    HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.

    November 17, 2020 WebPage Regulatory News
    News

    ESRB Supports Extension of Macro-Prudential Measure by Swedish FSA

    ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).

    November 17, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6153