Comments by Julie Dickson, Superintendent
Oct., 2011 – Taking a measured approach speaks to our dialogue with the financial services industry to find a balance between the free operation of market forces and necessary regulation. This was particularly important in 2010-2011, as Canadian financial institutions began to rebound after the global financial crisis and sought opportunities to grow. We emphasized, and continue to emphasize, the need to act carefully and with prudence in order to maintain stability in the system and secure the foundation for continued success, both for our organization and for those we regulate.
International regulatory bodies have proposed a number of regulatory changes that may have a transformational impact on the global financial system. Our continuing participation in international forums and rule-making bodies, such as the Financial Stability Board, Basel Committee on Banking Supervision, Senior Supervisors Group, Joint Forum, and International Association of Insurance Supervisors, allows us to contribute our perspective to improving global standards, while securing modifications that reflect the Canadian regulatory experience and that of Canadian financial institutions. Understanding the cumulative impact of these changes will be important.
We continued to work closely with our federal government partners (Bank of Canada, Department of Finance, Canada Deposit Insurance Corporation, and Financial Consumer Agency of Canada) to monitor the resilience of the financial sector, via discussions on macro-economic and systemic risk issues, as well as discussions concerning the health of financial institutions.
To ensure that we are promoting the best practices the industry, depositors and policy holders deserve, we planned and conducted comparative reviews for corporate governance, stress testing, commodities and information security. Feedback is provided to federally regulated financial institutions (FRFIs) on the results as the reviews are completed. On the internal front, our Supervisory Framework, which was first produced in 1999 to guide supervisors in their day-to-day reviews of financial institutions, was reviewed and renewed.
Building on the success of previous years, we continued to host annual risk management seminars for deposit-taking institutions, and the life insurance and property and casualty insurance industries. We also held a number of Colleges of Supervisors, which brought together supervisors from other countries to receive presentations from some of Canada’s largest financial institutions, including the first college for a large life insurance company. Internally, we completed our project on moving to International Financial Reporting Standards (IFRS) on time and on budget. This included posting financial and regulatory reporting forms and revised accounting guidelines, completing necessary Information Management and Information Technology system changes, and developing IFRS training for employees.
Our people are the most important element of our success. In 2010-2011, we increased our staff complement in specialized skills such as research, insurance, credit risk and capital to enhance our ability to guide and supervise FRFIs in managing risks. Taking a measured approach means finding the right balance between sometimes conflicting perspectives. It is essential that we continue to adapt to international changes in markets and regulations while allowing institutions to take risks and innovate. This report highlights how we achieved that balance over the past year.
Read the annual report highlights (20 pages).
Read the full annual report (92 pages).
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.