Peter Routledge participates in a fireside chat at the Northwind Financial Forum

Check against delivery

Moderator:

Reflecting on your five-year tenure, what accomplishments are you most proud of, and are there areas where, in hindsight, you might have taken a different approach? How has the evolving global environment influenced your priorities and decisions along the way?

Superintendent Peter Routledge:

• I’m most proud of the strength and resilience of Canada’s financial system today. Over the past five years, we’ve reinforced capital and liquidity, strengthened supervision, and implemented measures to support our expanded mandate to also cover integrity and security risks.
• We’ve also modernized how we operate — with clearer supervisory expectations and a streamlined policy framework, and an accelerated path for new entrants.
• The environment has changed quickly. From the pandemic to geopolitical tensions to rapid technological change including of course, AI. One of the biggest shifts for us has been becoming more forward-looking, focusing more on the risks ahead than those behind us.
• In that context, we’re now placing greater emphasis on balance — maintaining resilience while asking ourselves what we can do to get out of the way of growth, including through policy modernization, streamlined approvals, and supporting new entrants.

Moderator:

OSFI’s Annual Risk Outlook continues to shape industry focus, what are the most significant risks currently on your radar, and how should institutions be preparing to address them?

Superintendent Peter Routledge:

• The key risks facing institutions are:
  • real estate secured lending
  • non‑bank financial institutions (NBFI)
  • funding and liquidity
• While these risks are familiar, their nature has evolved. Housing and mortgage pressures are intensifying in certain regions, exposures to activities outside the traditional banking system are growing—particularly where non‑banks are taking on greater leverage—and global uncertainty continues to test confidence in funding markets. Although funding conditions have remained stable to date, institutions must remain prepared for how quickly a liquidity event could emerge under stress.
• Institutions should not rely on past resilience. They should anticipate localized housing stress, interconnected NBFI shocks, and confidence‑driven liquidity events, and respond with early intervention, disciplined risk limits, stronger analytics, and operational readiness for stress.
• More broadly, preparedness today means being resilient and adaptable at the same time. Institutions should be able to absorb shocks, but they also need to be forward-looking — whether that means managing renewal risk in mortgage books, understanding exposures outside the regulated perimeter, or making sure operational and integrity controls keep pace with technological change.

Moderator:

There has been growing interest in facilitating new entrants into the market, how is OSFI thinking about streamlining processes while maintaining prudential rigor?

Superintendent Peter Routledge:

• With the changing financial landscape, OSFI ‘s new streamlined framework is part of a deliberate modernization strategy. Innovation is already happening in financial services, and we’d rather see that innovation occur within the regulated perimeter and aligned with prudential standards. We know that we have a part to play in enabling that outcome and we have to nail that outcome within prudential standards. As such, we have to meet them halfway.
• OSFI’s streamlined approvals framework for eligible applicants (credit unions and fintechs) aims to make the path to a federal license quicker, clearer, and more predictable, while still maintaining strong oversight.
• Building on an already strong prudential foundation, the streamlined approvals framework is designed to enhance clarity, remove avoidable barriers, and better accommodate emerging technologies and business models. The result is a more agile, innovation‑ready environment that reflects the evolving nature of Canada’s financial sector.
• Key differences include:
  • Streamlined review steps: Overall approval times are expected to be shorter. Right-sized, risk-based prudential reviews will take place that provide a more predictable and faster path into the federally regulated financial system.
  • Greater clarity and transparency: OSFI aims to provide clearer guidance on requirements, timelines, and review steps up front, supported by transparency to help applicants track their progress through the process.
  • Modernized, risk-based posture: OSFI is shifting toward a more calibrated approach that focuses supervisory attention where it matters most, enabling efficiency without compromising prudential outcomes.

Moderator:

OSFI recently released its technical note on benchmarking Canadian bank capital ratios against international peers. How should we interpret these findings, particularly in the context of the Domestic Stability Buffer and broader capital expectations?

Superintendent Peter Routledge:

• The main takeaway is that Canadian banks are strongly capitalized, profitable, and capital requirements are broadly comparable to major international peers. The note is useful because it helps ground the debate in evidence. It shows that Canada is not an outlier on capital, and that our framework is supporting both resilience and competitiveness.
• A feature unique to Canada is that a large portion of the systemically important banks (SIBs) capital stack is non-binding due to our more flexible principles-based approach to the Domestic Stability Buffer (DSB). The DSB does not trigger automatic constraints. For SIBs, this means a sizable cushion beyond binding requirements: about $60B+ over the CET1 range and $45B+ over the DSB range. How to deploy it is up to each institution.
• More broadly, the message is one of confidence, not complacency. Strong capital gives institutions room to absorb shocks and continue lending, but OSFI will continue to calibrate expectations based on Canadian risks and evidence, not on policy moves elsewhere. That is the broader context for capital expectations going forward.