Featured Product

    OSFI Decides to Keep Domestic Stability Buffer for D-SIBs Unchanged

    June 23, 2020

    OSFI announced its decision to maintain the Domestic Stability Buffer at 1% of total risk-weighted assets. The buffer remains unchanged from the level set on March 13, 2020 as part of the response of OSFI to the COVID-19 crisis. The buffer is calculated as described under the Capital Adequacy Requirements (CAR) Guideline and is intended for the six largest banks that have been designated as domestic systemically important banks, or D-SIBs, in Canada.

    In March 2020, the Domestic Stability Buffer was lowered by 1.25% to provide banks with additional lending capacity during the COVID-19 crisis. OSFI expects banks to continue to draw on this capacity to support Canadian businesses and households. The decision to keep the buffer unchanged reflects the OSFI assessment that the current Domestic Stability Buffer level remains effective in supporting the resilience of the Canadian banking system and the overall economy. OSFI expects banks to continue to draw on this capacity to support Canadian businesses and households. The Domestic Stability Buffer requires six largest banks in Canada to set aside a portion of their capital during good times so they can draw down on that reserve in times of economic stress. As of June 2020, the federally regulated financial institutions that have been designated as domestic systemically important banks are Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, and Toronto-Dominion Bank.

    OSFI reviews and sets the level of the Domestic Stability Buffer on a semi-annual basis (June and December), based on its ongoing monitoring of federally regulated financial institutions as well as system-wide and sectoral developments. When OSFI lowered the Domestic Stability Buffer on March 13, it committed that any increases to the buffer will not take effect for at least 18 months. The largest banks in Canada entered this downturn from a position of strength and both the quantity and quality of their capital remains strong. Fiscal and monetary policy responses have also helped to cushion the impact of the pandemic. However, vulnerabilities in the financial system remain elevated and the pace of economic recovery is difficult to predict. The pandemic has added pressure on highly indebted households and businesses while asset imbalances remain elevated. Lower global growth also presents the possibility that some external risks could spill over into the Canadian financial system. 

     

    Related Links

    Keywords: Americas, Canada, Banking, Domestic Stability Buffer, COVID-19, Regulatory Capital, D-SIBs, Basel, OSFI

    Featured Experts
    Related Articles
    News

    EBA Publishes Standards on Disclosure of Investment Policy Under IFR

    The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).

    October 19, 2021 WebPage Regulatory News
    News

    EBA Updates Filing Rules for Supervisory Reporting

    The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    APRA Finalizes Guidance for New Prudential Standard on Remuneration

    The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.

    October 18, 2021 WebPage Regulatory News
    News

    OCC Updated LIBOR Self-Assessment Tool for Banks

    The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).

    October 18, 2021 WebPage Regulatory News
    News

    TCFD Updates Guidance for Financial Disclosures on Climate Risk

    The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

    October 14, 2021 WebPage Regulatory News
    News

    BCBS Report Examines Progress on Adoption of Basel III Framework

    The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.

    October 14, 2021 WebPage Regulatory News
    News

    ACPR Implements Updates Related to DPM Version 3.1

    The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.

    October 14, 2021 WebPage Regulatory News
    News

    EBA Note Examines Transition Risks of Benchmark Rates

    The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.

    October 14, 2021 WebPage Regulatory News
    News

    OSFI to Communicate Next Steps on Climate Risk Policy in Early 2022

    In a letter to the federally regulated financial institutions and pension plans, the Office of the Superintendent of Financial Institutions (OSFI) published a summary of the feedback received to the January 2021 discussion paper on ways to address climate risks.

    October 12, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7568