OSFI to Implement Operational Risk Capital Rules for Banks in Q1 2022
OSFI decided to move domestic implementation of the revised Basel III operational risk capital requirements from the first quarter of 2021 to the first quarter of 2022. This revised implementation date coincides with the implementation of the final Basel III credit risk and leverage ratio requirements. OSFI has made this announcement in a letter addressed to banks, bank holding companies, and federally regulated trust and loan companies.
The re-alignment provides several benefits including additional time to clarify reporting instructions, with the objective of ensuring a consistent interpretation of the revised requirements. It also aligns with the expected implementation date of the revised capital and liquidity requirements for small and medium-size institutions. Deposit-taking institutions that previously used the Advanced Measurement Approach, or AMA, for operational risk capital purposes should continue to use the standardized approach until the first quarter of 2022. Other institutions should also continue to use the approach they are currently using (either Standardized or Basic Indicator) until the first quarter of 2022.
Further consultation related to the 2022 domestic implementation of the final Basel III reforms, through the OSFI Capital Adequacy Requirements (CAR) for operational risk and credit risk and the leverage requirements guideline, will take place in late spring 2020. This consultation, in addition to the consultative document on small and medium-size institution capital and liquidity requirements, will provide more detail on the expected operational risk capital requirements that will apply to deposit-taking institutions starting in 2022.
Related Link: News Release
Keywords: Americas, Canada, Banking, Operational Risk, Basel III, Reporting, Capital Adequacy Requirements, OSFI
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
OSFI Consults on Instruction Guide for Termination of Pension PlanRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BCBS Issues Climate Risk Principles while HKMA Expresses Its Support
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.