Capital Adequacy Requirements (CAR) 2017

OSFI is releasing the final version of the CAR Guideline for implementation in Q1 2017*. The updates will: 1) implement the Equity Investment in Funds rules issued by the Basel Committee on Banking Supervision; 2) clarify how OSFI will exercise national discretion in the implementation of the countercyclical buffer; 3) specify revisions to the treatment of insured residential mortgages and 4) clarify how the Guideline will apply to federal credit unions, particularly with respect to qualifying capital instruments, deductions from capital and transitioning of non-qualifying instruments.

The Guideline also includes final guidance on the implementation of the downturn loss given default (DLGD) floor which applies to banks using an internal rating based (IRB) approach for loans secured by residential real estate.

* Q1 2017 refers to November 1, 2016 for institutions with an October 31st year end and January 1, 2017 for institutions with a December 31st year end.