- Type of Publication: Guideline Impact Analysis Statement
- Date: November 2017
- Reference: Guideline for Banks/BHC/T&L/CRA
OSFI’s CAR guideline provides a framework for assessing the capital adequacy of banks, bank holding companies, federally regulated trust and loan companies and cooperative retail associations.
II. Problem Identification
The CAR guideline is updated periodically as needed to ensure that capital requirements continue to reflect underlying risks and developments in the financial industry.
OSFI’s objective is to ensure that the guideline remains comprehensive and that the requirements reflect the underlying risk. Specifically, the proposed revisions will:
- Clarify how allowances are to be treated for capital purposes in the CAR Guideline given the adoption of IFRS 9.
- Clarify how the G-SIB surcharge interacts with the D-SIB surcharge.
- Provide other clarifications throughout the guideline to improve readability and consistency in application.
OSFI issued the revised CAR guideline for public consultation in August 2017. A summary of material comments received from industry stakeholders and an explanation of how they have been addressed has been provided along with the final Guideline.
It is recommended that the CAR guideline be updated to ensure capital requirements continue to reflect underlying risk and to provide clarification on OSFI’s expectations around the aforementioned requirements.
The final version of the guideline will be effective November 1, 2017/January 1, 2018.