OSFI Outlines Prudential Policy Priorities for Coming Months
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.
Related Links
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
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
MAS Launches FinTech Hackcelerator for Development in Green FinanceRelated Articles
OSFI Issues Phase2 Consultation on Climate Scenario Exercise for Banks
The Office of the Superintendent of Financial Institutions (OSFI) recently announced a consultation on the second phase of the Standardized Climate Scenario Exercise (SCSE) for banks and other financial institutions it regulates in Canada.
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
