## Canada: Financial Sector Assessment Program-Technical Note-Systemic Risk Oversight and Macroprudential Policy

_IMF Staff Country Reports, January 24, 2020_

## Source details

**Canonical URL:** [Canada: Financial Sector Assessment Program-Technical Note-Systemic Risk Oversight and Macroprudential Policy](https://www.imf.org/en/publications/cr/issues/2020/01/23/canada-financial-sector-assessment-program-technical-note-systemic-risk-oversight-and-48973)

## Other formats

- [Markdown version](/en/publications/cr/issues/2020/01/23/canada-financial-sector-assessment-program-technical-note-systemic-risk-oversight-and-48973/index.md)
- [Structured JSON version](/en/publications/cr/issues/2020/01/23/canada-financial-sector-assessment-program-technical-note-systemic-risk-oversight-and-48973/index.json)
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## Bibliographic details
- Published: January 24, 2020
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513527185.002

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### Summary of the Technical Note
- Provides a summary of the review of systemic risk oversight arrangements and macroprudential policy issues in Canada.
- Discusses existing systemic risk oversight arrangements and potential challenges.
- Presents steps to modernize the framework to ensure effectiveness going forward.
- Focuses on systemic risk surveillance (current approaches and challenges such as data gaps and coordination) and macroprudential policy issues (toolkit, current policy stance, and overall policy effectiveness).
- Concludes that steps can be taken to improve the current system with a more formalized arrangement for systemic risk oversight.
- States that a single body in charge of systemic risk oversight would be the first-best option.
- Recommends that, over time, the authorities should review whether systemic risk oversight under the Heads of Agencies Committee leadership with no statutory mandate is adequate.
- Notes that macroprudential policy at the federal level has been effective; however, better coordination is essential given multiple provincial authorities’ ownership of prudential tools.

### Systemic Risk Surveillance: Current Approaches and Challenges
- Emphasis on systemic risk surveillance as a core focus of the review.
- Identified challenges:
  - Data gaps.
  - Coordination issues among authorities.
- Suggested modernization steps aimed at ensuring the effectiveness of surveillance going forward.

### Macroprudential Policy: Toolkit, Stance, and Effectiveness
- Reviews the macroprudential toolkit available in Canada.
- Assesses the current policy stance.
- Evaluates overall policy effectiveness:
  - Concludes federal-level macroprudential policy has been effective.
  - Highlights the need for better coordination because multiple provincial authorities own prudential tools.

### Key Recommendations and Institutional Options
- Move toward a more formalized arrangement for systemic risk oversight.
- Establish a single body in charge of systemic risk oversight as the first-best option.
- Review whether systemic risk oversight under the Heads of Agencies Committee leadership with no statutory mandate remains adequate over time.
- Improve coordination between federal and provincial authorities given the provincial ownership of prudential tools.

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## Content in this bundle

- **1canea2020004**
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  - [1canea2020004 (PDF)](/-/media/files/publications/cr/2020/english/1canea2020004.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2020/01/23/canada-financial-sector-assessment-program-technical-note-systemic-risk-oversight-and-48973_