The Office of the Superintendent of Financial Institutions (OSFI) has issued an industry letter discussing adjustments to its policy plan, which seeks to search for regulatory efficiencies to help financial institutions take risks, compete effectively, and grow Canada’s economy.
Peter Routledge, OSFI’s superintendent of financial institutions, noted in a statement that OSFI will ensure that the changes will not impact the resilience of the financial institutions supervised.
Routledge shared that the updated plan aims to support the federal government’s red tape review, as well as maintain OSFI’s work last year to refine its regulatory guidelines and advisories and consider ways to eliminate unnecessary burden.
“This effort to recalibrate our regulatory framework is not a singular event,” Routledge said. “Rather, it is part of who we are as a modern regulator. It will be ongoing, as we continuously enhance our risk response, clarify our regulatory expectations, and improve the overall efficiency of our oversight.”
Regulatory efforts
In the statement, Routledge noted that the OSFI has taken the following steps to improve regulatory and supervisory effectiveness:
- In spring 2024, it launched its policy modernization initiative, which aimed to ensure continuous and comprehensive reviews for removing outdated or redundant regulatory guidance
- Last April, it rescinded 20 guidelines and industry advisories and refined its policy release schedule to enhance transparency and predictability for regulated constituents
- This winter, it paused Basel III implementation of the “output floor” to provide Canada’s banks with the competitive balance to compete in the international banking system and transparency and predictability in terms of capital expectations
- This spring, it shifted its policy to focus its work and regulated entities’ attention on significant risks in the financial system
- It continues to hold regular meetings, conversations, and correspondence to enable regulated constituents to suggest ways to improve regulatory and supervisory practices
- It acted on suggestions it considered beneficial and prudent
Routledge said OSFI plans to announce more rescissions of guidelines and advisories this fall. It will also work to streamline the supervisory and regulatory environment continually and proactively.
“Our actions will remain deliberate, focused, and strategic, mindful that resilience in the financial system is essential to a strong economy and helps create conditions for sustained economic growth,” Routledge said in the statement.
Routledge added that OSFI intends to provide more details on its planned policy in its fall semi-annual risk outlook, scheduled for release on Oct. 9.
“Canadians must have trust in the institutions that anchor our financial system,” Routledge said. “OSFI is prepared to act when risks emerge—as we leverage a strong foundation of public confidence in the Canadian financial system to support Canada’s economic growth.”