OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022. The key focus areas include implementation of the internationally agreed Basel III reforms, finalization of capital and liquidity guidance for small and medium-size banks, and issuance of guidance and consultations on climate risk, operational resilience, technology and cyber risk, and culture risk.
Next week, OSFI plans to release a letter summarizing feedback from the discussion paper on technology risk and setting out future guidance initiatives. In the first quarter of 2022, OSFI plans to publish draft of revised guideline on third-party risk, an industry letter on advanced analytics and model risk, and a consultative document on culture and reputation risk. OSFI intends to publish a discussion paper and draft guideline on the assurance of capital, leverage, and liquidity returns in the second and fourth quarters of 2021, respectively, with the publication of the final guideline on assurance of capital, leverage, and liquidity returns expected in the first quarter of 2022. Then, in the second quarter of 2021, OSFI plans to publish:
- draft expectations for data maintenance for institutions that are using the Standardized Approach for operational risk under Chapter 3 of the Capital Adequacy Requirements Guideline.
- advisory regarding implementation of the disclosure requirements on global systemically important bank (G-SIB) indicators in Canada.
- draft guideline that proposes changes related to credit valuation adjustment (CVA) risk.
Next, in the third quarter of 2021, OSFI plans to launch:
- proposal for future climate risk initiatives and summarize the feedback received on climate risk discussion paper that was issued in the first quarter of 2021.
- consultation on integrating into OSFI guidance the new BCBS Principles for Sound Management of Operational Risk and the Principles for Operational Resilience.
- draft guideline that outlines a more proportional set of Pillar 3 disclosure requirements for small and medium-size banks, with the final guideline expected to be published in the fourth quarter of 2021.
- a survey intended to inform potential future revisions to processes and guidance of OSFI for Pillar 2 capital and liquidity expectations for small and medium-size banks.
Finally, in the fourth quarter of 2021, OSFI plans to publish:
- final guidelines on domestic implementation of the Basel III Reform Package, including the guidance for credit, operational, market, and CVA risks; output floor; leverage ratio; definition of capital; and Pillar 3 disclosures.
- draft guideline that sets out expectations for technology and cyber risk management.
Keywords: Americas, Canada, Banking, Basel, Credit Risk, Market Risk, Operational Risk, Cyber Risk, Technology Risk, Regulatory Capital, SME, Proportionality, Climate Change Risk, Pillar 3, CVA Risk, OSFI
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