OSFI – issued remarks outlining Canadian domestic implementation of, and current guidance to ensure appropriate application of Basel III reforms

April 27, 2021 – Key focus to tailor approach, to accommodate risk sensitivity of smaller institutions.

Capital, Leverage, and Liquidity Assurances
Consultation on assurance related to capital, leverage, and liquidity returns, to broaden expectations for external and internal audit opinions, management attestation. Propose to apply assurances to capital returns of all federally regulated insurers; and capital, leverage, liquidity returns of all federally regulated deposit-taking institutions.

Small and Medium Sized Firms
Draft guideline issued, for small and medium-sized deposit-taking institutions (SMSB), to help firms to understand the applicability of capital, leverage, and liquidity guidance.

Risk Sensitivity to Capital Rules
A quantitative study conducted, to assess the impact of Basel III Standardized approach to credit risk capital requirements on firms, e.g., CRE/residential bespoke risk weighting. Study addresses deposit-taking institutions’ solvency buffers across components. Includes ABS, commercial mortgages, short-term investments, and off-B/S exposures.

For more information, visit www.osfi-bsif.gc.ca.

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