Canada: Financial Sector Assessment Program-Basel Core Principles for Effective Banking Supervision-Detailed Assessment of Observance

IMF Staff Country Reports, March 7, 2014

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Canada: Financial Sector Assessment Program-Basel Core Principles for Effective Banking Supervision-Detailed Assessment of Observance

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Bibliographic details

• Published: March 7, 2014
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781475523157.002

Overview

• Report focus: Detailed assessment of observance of Basel Core Principles (BCP) for effective banking supervision in Canada.
• Key institutional focus: Office of the Superintendent of Financial Institutions (OSFI).
• Supervisory approach described: OSFI adopts a close and cooperative approach that supports the close network of federal authorities in identifying and seeking to mitigate prudential risks to the federal system.
• Expectation noted: As a world-leading regulator, OSFI could be expected to issue a comprehensive suite of risk management standards to be available to all banks, even if at a relatively high level or based largely on Basel Committee for Banking Supervision guidance.
• Subjects covered: Banking, Credit risk, Financial institutions, Financial regulation and supervision, Foreign banks, Labor, Market risk, Operational risk.

Key findings and analysis

• Supervisory orientation:
  • OSFI’s approach is characterized as close and cooperative with federal authorities to identify and mitigate prudential risks to the federal system.
• Standard-setting expectation:
  • Given OSFI’s status as a world-leading regulator, the report expects OSFI to issue a comprehensive suite of risk management standards for all banks, potentially at a relatively high level or based largely on Basel Committee guidance.
• Risk areas highlighted (keywords retained as in source):
  • corporate governance
  • CR
  • credit risk
  • Credit risk
  • Foreign banks
  • Global
  • internal audit
  • ISCR
  • Market risk
  • Operational risk
  • parent company
  • risk appetite
  • risk assessment
  • risk management
  • risk profile
  • senior management

Policy recommendations and implications

• Strengthen and publish comprehensive risk management standards applicable to all banks, drawing on Basel Committee for Banking Supervision guidance where appropriate.
• Maintain and support close cooperative arrangements among federal authorities to identify and mitigate prudential risks across the federal banking system.
• Ensure supervisory guidance covers key areas listed under keywords, including corporate governance, internal audit, risk appetite, risk assessment, and operational risk.

Content in this bundle

• Financial Sector Structure, end 2012
  • Financial Sector Structure, end 2012 (Markdown version)
  • Financial Sector Structure, end 2012 (PDF)