Backgrounder: Consultative document on Credit Risk Management

Overview

The Office of the Superintendent of Financial Institutions (OSFI) is developing a comprehensive Credit Risk Management (CRM) Guideline to strengthen how institutions manage credit risk. The guideline will consolidate and streamline existing regulatory expectations and incorporate international best practices on credit risk. By clarifying its expectations in a single guideline, OSFI aims to enhance regulatory and supervisory efficiency. The guideline will also support agile responses to evolving areas of risk, including non-bank financial intermediation (NBFI) and counterparty credit risk.

Why it’s important

Credit risk is a fundamental risk for financial institutions, and mortgage and commercial lending consistently rank among the top risks in OSFI’s Annual Risk Outlook. Today, OSFI’s expectations for sound credit risk management are spread across multiple guidelines, notices, advisories, and letters. Bringing these expectations together in a single, clear guideline will reduce compliance burden, close regulatory gaps, and make it easier for institutions to interpret and apply OSFI’s guidance.

Next steps

OSFI will use a phased approach to consultation on the draft CRM Guideline. OSFI is seeking input on the consultation document by July 29, 2026. After this initial phase, OSFI plans to release draft chapters on:

• the overarching principles aligned with international standards
• wholesale credit risk management covering loans to institutions, corporates, partnerships, proprietorships and commercial real estate
• NBFI risk management informed by recommendations from the Financial Stability Board and counterparty credit risk practices from the Basel Committee on Banking Supervision
• real estate secured lending, including consolidated expectations currently in Guideline B‑20: Residential mortgage underwriting practices and procedures, and related advisories, notices and letters