November, 2008 – Financial institutions operate globally, and products and markets are increasingly complex. This makes the job of regulating far more challenging. The theme of this annual report — Navigating through Global Currents — reflects the importance OSFI and other regulators place on taking a domestic and global perspective in the financial services sector.
OSFI was established in 1987 by an Act of Parliament: the Office of the Superintendent of Financial Institutions Act (OSFI Act). OSFI supervises and regulates all banks in Canada and all federally incorporated or registered trust and loan companies, insurance companies, cooperative credit associations, fraternal benefit societies and private pension plans.
OSFI’s supervisory framework and regulatory regime are designed to ensure that Canada’s federally regulated financial institutions are sound and prepared to weather unforeseen events. In 2007-2008, OSFI focused on helping Canada’s financial sector navigate through the global financial market turmoil.
OSFI’s role is to contribute to the safety and soundness of the Canadian financial system, while allowing federally regulated financial institutions and private pension plans to compete effectively and take reasonable risks. We navigate through global financial currents to balance competitiveness with prudence; international rules with Canadian market realities; and efficiency with thoroughness. This approach guided our performance during 2007-2008.
Last year’s Annual Report listed seven priorities to achieve OSFI’s strategic outcomes for 2007-2008. This section reports major accomplishments under each of the priorities. OSFI achieved its goals for the reporting year and continues to work on these multi-year priorities. More details are available in various chapters of the report.
Priorities for 2008-2009
OSFI has identified the following eight priorities to achieve our strategic outcomes for 2008-2009. More details can be found on OSFI’s Web site in the Report on Plans and Priorities 2008-2009 to 2010-2011.
- Improve OSFI’s ability to identify, monitor and report on emerging risks to federally regulated financial institutions by increasing resources and enhancing processes.
- Participate in international discussions about key issues arising from global market turmoil, and work with Financial Institutions Supervisory Committee (FISC) partners on similar issues in Canada.
- Prepare for the move to International Financial Reporting Standards (IFRS) in 2011, by determining the implications for OSFI, assessing policy requirements and addressing data collection and reporting.
- Adjust the current Minimum Continuing and Capital Surplus Requirements (MCCSR), by developing and agreeing on a capital framework for life insurance companies over the next four years.
- Respond to suggestions or recommendations in the Financial Sector Assessment Program (FSAP) report and the Financial Action Task Force (FATF) report.
- Complete the post-implementation phase of the Basel II Capital Accord, by monitoring Basel II systems and reviewing banks’ capital adequacy assessment processes and relevant policies.
- Ensure OSFI has the human resources available to fulfil its mandate, through better long-range, integrated planning.
- Enhance OSFI’s ability to perform as required in an increasingly complex pensions environment by enhancing OSFI’s pension systems and processes.
See the report on the OSFI web site at http://www.osfi-bsif.gc.ca/osfi/index_e.aspx?ArticleID=2689 in either an html or pdf format.
OSFI is an independent agency of the Government of Canada. It reports to the Minister of Finance. For more information visit www.osfi-bsif.gc.ca.
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