Opening Remarks – Superintendent at BANC – October 30, 2025

Chair, Honourable Senators,

Thank you for the opportunity to appear before you today.

As Canada navigates through a period of pronounced uncertainty, I would like to assure this Committee that Canada’s federally-regulated financial institutions have built enduring resilience into the financial system. We see this resilience as a strategic advantage for Canada; one that can be leveraged to contribute to economic growth.

For example, currently, Canada’s six largest banks core capital ratios average 13.7%, versus a well-capitalized minimum of 11.5%. This outcome leaves Canada’s banking system with substantial buffers to absorb unexpected losses and substantial opportunities to contribute to the country’s growth. We estimate that banks could make nearly $1 trillion in loans, or other extensions of credit, and remain above current capital minimums; a material figure to Canada’s $3 trillion economy.

I do not imply that Canada’s banks should go on an aggressive lending spree; but I do mean to suggest that our financial system has the resilience to contribute more to our country’s adjustment to a very different geopolitical environment. And OSFI stands ready to consider whether further regulatory adjustments can be made without compromising financial system resilience.

We at OSFI have also adopted a “smart oversight” approach to supervision.

Smart oversight is a series of deliberate and proactive actions to enhance transparency, provide predictability and reduce unnecessary burden for our regulated entities. In addition to being principle-based, we also work to ensure the right amount of regulatory oversight and supervisory intensity, appropriate for today’s risk environment.

Over the past 18 months, we launched the most comprehensive review of regulatory content in OSFI’s history and will result in rescinding or eliminating more than 300 pages of documents in English and over 600 pages in both languages. More importantly, we have embedded the habit of asking what regulations we can ease or remove just as frequently as asking what regulations we can add.

I want to stress, however, that smart oversight does not mean less supervision or action to address key risks. We have continued to take early action on risks with prudential consequences like foreign interference, money-laundering, cybersecurity, governance, and third-party dependencies. As we look for opportunities to ease regulatory burden, we are resolute in maintaining appropriate supervisory intensity.

Our new Supervisory Framework includes risk ratings, or grades, for a wider, more comprehensive array of resilience factors: business risk, governance, financial resilience, and operational resilience. These ratings provide boards with clearer insights into their institutions’ risk discipline.

We are committed to ensuring that Canada’s financial system remains a source of strength in an intensifying risk environment.

Thank you. I look forward to your questions.