OSFI warns CIBC over risk management controls

By Staff | February 25, 2015 | Last updated on February 25, 2015
1 min read

Alleged deficiencies in CIBC’s risk management controls have drawn the attention of the Office of the Superintendent of Financial Institutions (OSFI), according to a Wall Street Journal report.

Read: OSFI’s three challenges

CIBC “was first warned by regulators about two years ago that a number of issues with the bank’s computer models were causing it to underestimate risk across its business,” sources told WSJ.

The report says CIBC is currently under heightened scrutiny as it eyes acquisitions in the U.S., particularly in private banking and wealth management. “OSFI hasn’t banned CIBC from making transactions. But it has told the bank that it wouldn’t approve certain types of deals until the regulator is confident that CIBC can accurately determine its current risks, a person familiar with the matter said.

“This means that CIBC faces more scrutiny on major deals that carry higher levels of financial risk until its models are fixed, the people familiar with the matter said.”

CIBC is currently working towards revising its models to meet OSFI’s requirements, adds the report.

Read the rest here.

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Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.