Tuesday, March 26, 2013

The Office of the Superintendent of Financial Institutions (OSFI) : Canada’s domestic systemically important banks identified


Canada’s domestic systemically important banks identified

OTTAWA –March 26, 2013 –

Canada’s six largest banks have been identified as being of domestic systemic importance, and will be subject to continued supervisory intensity, enhanced disclosure, and a one per cent risk weighted capital surcharge by January 1, 2016.

The Office of the Superintendent of Financial Institutions (OSFI) released the names of the banks, following careful consideration of the Basel principles, and in consultation with the Financial Institutions Supervisory Committee (FISC), which is chaired by the Superintendent and includes representatives from the Department of Finance, the Bank of Canada, the Canada Deposit Insurance Corporation, and the Financial Consumer Agency of Canada.

The Canadian domestic systemically important banks (D-SIBs) are the: Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, and Toronto-Dominion Bank. Further details can be found in the letter and advisory posted on OSFI’s website.

"The measures we are announcing today are designed to limit the likelihood that a major bank would encounter distress or failure that could negatively impact the Canadian economy or taxpayers," said Julie Dickson, Superintendent of Financial Institutions.

The Basel Committee on Banking Supervision released a framework in October 2012 that set out a principles-based approach requiring national authorities to assess and designate domestic systemically important banks and determine a capital surcharge.

The criteria used to determine systemic importance include size, interconnectedness, substitutability and complexity. The Basel principles allow regulators some flexibility in determining systemic importance.

Created in 1987 by an Act of Parliament, the Office of the Superintendent of Financial Institutions (OSFI) is the primary regulator and supervisor of federally regulated deposit-taking institutions, insurance companies, and federally regulated private pension plans. OSFI's mandate is to advance and administer a regulatory framework that contributes