Capital Adequacy Requirements and Total Loss-Absorbency Capacity

OSFI is issuing the final version of amendments to the Capital Adequacy Requirements guideline (principally to chapter 2). The changes implement the amendments to Basel III finalized by the Basel Committee on Banking Supervision in October 2016 in respect of holdings of instruments issued by global systemically important banks that qualify towards their Total Loss-Absorbing Capacity (TLAC) requirements and instruments ranking pari passu with those instruments. Given the potential for this initiative to reduce a significant source of contagion in the banking system, OSFI will be applying this standard to all deposit-taking institutions and will extend the Basel III treatment to holdings of TLAC issued by Canadian domestic systemically important banks.