Capital Adequacy Requirements (CAR) – Guideline (2023)

Publication type
Capital Adequacy Requirements
Trust and Loan Companies
Effective Date
February 2023 / April 2023
Table of contents


Effective date for institutions with a fiscal year ending October 31 or December 31, respectively.

Subsections 485(1) and 949(1) of the Bank Act (BA), subsection 473(1) of the Trust and Loan Companies Act (TLCA) require banks (including federal credit unions), bank holding companies, federally regulated trust companies, and federally regulated loan companies to maintain adequate capital. The CAR Guideline is not made pursuant to subsections 485(2) or 949(2) of the BA, or to subsection 473(2) of the TLCA. However, the capital standards set out in this guideline together with the leverage requirements set out in the Leverage Requirements Guideline provide the framework within which the Superintendent assesses whether a bank, a bank holding company, a trust company, or a loan company maintains adequate capital pursuant to the Acts. For this purpose, the Superintendent has established two minimum standards: the leverage ratio described in the Leverage Requirements Guideline, and the risk-based capital ratio described in this guidelineThe capital and leverage requirements for domestic systemically-important banks are supplemented by the requirements described in OSFI's Total Loss Absorbing Capacity (TLAC) Guideline.. The first test provides an overall measure of the adequacy of an institution's capital. The second measure focuses on risk faced by the institution. Notwithstanding that a bank, bank holding company, trust company, or loan company may meet these standards, the Superintendent may direct a bank or bank holding company to increase its capital under subsections 485(3) or 949(3) of the BA, or a trust company or a loan company to increase its capital under subsection 473(3) of the TLCA.

OSFI, as a member of the Basel Committee on Banking Supervision, participated in the development of the Basel capital framework on which this guideline is based. Where relevant, the Basel framework paragraph numbers are provided in square brackets at the end of each paragraph referencing material from the Basel framework.

The Capital Adequacy Requirements (CAR) for banks (including federal credit unions), bank holding companies, federally regulated trust companies, and federally regulated loan companies are set out in nine chapters, each of which has been issued as a separate document. This document should be read in conjunction with the other CAR chapters.

Final Guideline

Basel Capital Adequacy Reporting (BCAR)

Implementation Notes for IRB Institutions

Approvals Related to OSFI Guidelines

Please refer to OSFI's Corporate Governance Guideline for OSFI's expectations of institution Boards of Directors in regards to the management of capital and liquidity.