March, 2010 – The Office of the Superintendent of Financial Institutions (OSFI) is tasked with overseeing the solvency of federal financial institutions in the interest of depositors and policyholders, and protecting members in private federal pension plans.
While financial markets have stabilized, risk and uncertainty in the global economy persists, and this is expected to have a continuing impact on the financial institutions and pension plans subject to OSFI oversight. Under the duress of recent events, we discovered that the strength of the Canadian financial system is due to Canada�s overall policy framework, the quality of OSFI�s supervision and regulation, the level of cooperation and communication among Financial Institutions Supervisory Committee (FISC) partners (OSFI, the Bank of Canada, the Canada Deposit Insurance Corporation, the Financial Consumer Agency of Canada and the Department of Finance) and the risk management skills of Canada�s financial institutions.
As knowledge sharing is an important element of robust risk management, in the coming year OSFI will continue its annual risk management seminars for Chief Risk Officers of banks and insurance companies to communicate our expectations, to share best practices and developments, and to provide an opportunity for dialogue with OSFI supervisors and regulators. We will continually adjust operations to address emerging issues (such as expanding stress testing, and addressing risk associated with compensation plans, governance and information management systems at financial institutions). In the increasingly interconnected world of global finance, supervisory colleges (including �living wills�) provide an opportunity for information sharing and dialogue between some of Canada�s major financial institutions and the host regulators of countries in which these institutions do business. The first Financial Stability Board-sanctioned college took place in February 2009, with a number of key global supervisors of the Royal Bank attending. Similar Colleges are planned with other leading institutions in 2010.
OSFI will also continue to be active internationally with fellow members of the Basel Committee on Banking Supervision (BCBS) and the international Senior Supervisors Group. We will participate in meetings of the Financial Stability Board and the International Association of Insurance Supervisors. These forums are increasingly important as they represent a way to enhance communication with international peers on the day-to-day challenges that arise in the global banking system. Areas under review in these international groups will include the need to develop a strengthened capital framework, enhanced oversight of liquidity, research in relation to systemic risk and systemically important institutions, markets and instruments, and the need to shine more light onto unregulated parts of the financial system.
This 2010�2011 Report on Plans and Priorities notes several areas where OSFI will focus. Through these initiatives, OSFI will play its part in contributing to a strong domestic financial system, one in which Canadians can place their trust.
For the full report, go here
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.