Extension of exclusions from the leverage ratio exposure measure

Document Properties

  • Type of Publication: Letter
  • Date: November 5, 2020
  • To: Deposit-Taking Institutions (DTIs)

The Office of the Superintendent of Financial Institutions (OSFI) continues to actively monitor the evolving pandemic and assess its impacts on the financial and operational capacity of deposit-taking institutions, or DTIs.

As a result of this work, and further to the actions communicated in its April 9, 2020 letter, OSFI is announcing an eight-month extension for DTIs to continue to exclude central bank reserves and sovereign-issued securities from their leverage ratio exposure measures. Accordingly, these exposures will be exempted from the leverage ratio until December 31, 2021.

OSFI views this action as necessary given the level of uncertainty that remains in the outlook for economic and financial conditions. In addition, this action will support DTIs’ ability to continue to supply credit to the economy, something that remains as relevant today as when the leverage ratio exclusions were originally announced in April.

OSFI continues to closely monitor the outlook for economic and financial conditions, and will continue to apply its four criteria—credible, consistent, necessary, and fit-for-purpose—when evaluating regulatory and supervisory measures taken to support the resilience of DTIs during this extraordinary period, including those measures announced today.