Reports find Canadian banks meet global standards

Measures adopted by Canadian banking regulators ensure the stability of the banking system meets — and in some areas exceeds — global standards, according to a review by the Basel Committee on Banking Supervision.

The global regulatory group issued reports on Thursday detailing Canada’s implementation of global standards for the net stable funding ratio (NSFR) and large exposures.

Overall, the review found that the rules adopted by the Office of the Superintendent of Financial Institutions (OSFI) are compliant with global standards. This is the highest of four possible assessment grades handed out in the review.

In Canada, the NSFR currently applies to all domestic systemically important banks (D-SIBs), although certain measures, such as disclosure requirements, are still being phased in.

The report noted that it did find one “potentially material” deviation from the Basel Committee’s requirements, which will be addressed in follow-up assessments. It also pointed to one area where OSFI’s requirements exceed the global minimum standards.

Similarly, the large exposures (LEX) framework also applies to all D-SIBs in Canada. In this area, the review didn’t uncover any shortcomings with the Canadian rules, but did find four areas where Canadian rules surpass global requirements.

Along with its review of Canada, the committee also issued reports for Australia and India, judging their regimes to be compliant as well.

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