Superintendent Peter Routledge participates in a fireside chat at the graduation celebration of the first international cohort of the Toronto Centre’s Certified Financial Supervisor designation

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Moderator:

The CFS program celebrates supervisors who are prepared for the future. How do you see the role of supervisors evolving over the next decade as financial systems become more interconnected and digitalized, while the speed of information transmission gets ever faster?

Superintendent Peter Routledge:

• Technology is breaking apart the usual model. As innovation accelerates, crises are inevitable—and it's imperative that you are prepared to navigate them.
• The fundamentals of supervision haven't changed: supervisors have always relied on judgment, foresight, and adaptability. What's different today is the environment — risks are more interconnected, data moves faster, and technology expands the range of vulnerabilities we must manage.
• Canada has long built its supervision on a principles-based, forward-looking foundation. What is shifting now is the culture of supervision: supervisors need to connect prudential standards with broader integrity and security risks, and apply them in a holistic, outcomes-focused way.
• The CFS graduates here today represent this cultural shift in practice. You are part of a new generation of supervisors who are globally connected, equipped to weigh risks across borders, and committed to a culture that balances resilience with space for innovation.

Moderator:

Over the past few years, the financial sector has faced unprecedented shocks — from the pandemic to geopolitical tensions and market volatility. What lessons stand out for you from OSFI's experience in navigating these uncertainties, and what do they mean for future leaders like our CFS graduates?

Superintendent Peter Routledge:

• We've all lived through an extraordinary series of shocks: a global pandemic, escalating geopolitical tensions, and sharp bouts of financial market volatility. The lesson I take from these is that uncertainty is the only constant — and resilience is the best preparation.
• OSFI's approach has been to prepare for the worst, build buffers in good times, and stay humble about the limits of what we can predict. That mindset of resilience — both financial and institutional — is what allows us to adapt when the unexpected happens.
• In good economic times, buying insurance or financial resilience is cheap. However in crises it's expensive (as we did in past cycles with the Domestic Stability Buffer). For supervisors, put on your protective gear, the pain upfront is a sacrifice for the greater good.
• For future supervisors, including today's CFS graduates, the lesson is clear: you will need to act early, think strategically, and stay results-focused. This is what we call "Always Be Advancing" at OSFI — never waiting for risks to materialize before you adapt your oversight.
• Another lesson is the importance of collaboration. No supervisor or institution can manage these shocks alone. We learn from our peers globally, and we work across borders to strengthen supervisory culture. CFS graduates are now part of this international shift, carrying forward a mindset that combines vigilance with adaptability.

Moderator:

Artificial intelligence, digital assets, and new financial technologies are reshaping the financial system. How can supervisors encourage innovation while protecting consumers, fostering innovation and productivity, and maintaining systemic stability?

Superintendent Peter Routledge:

• OSFI's mandate is to regulate and supervise federally regulated financial institutions to ensure their safety and soundness—it does not extend to direct consumer protection. My guiding principle is to 'first, do no harm.' We will allow institutions the space to innovate, while remaining vigilant in identifying and addressing material risks as they emerge.
• Digital assets, AI, and other emerging tools all hold promise for productivity and inclusion, but they also bring risks. Supervisors must keep a clear-eyed view: protect consumers and financial stability while giving space for responsible innovation.
• At OSFI, "Always Be Advancing" means modernizing our approvals process, easing entry for new players where it's prudent, and staying out of the way of innovators when the risks are manageable. This is how we balance resilience with progress.
• For the new CFS graduates, this reflects a global shift in supervisory culture. Around the world, supervisors are rethinking how to support innovation without letting risk accumulate unseen. They are also thinking about how to utilize innovation in their own roles to be more productive – improving efficiency and effectiveness. You are part of that international movement, and your work will shape how safe, effective oversight enables innovation globally.

Moderator:

We hear more about operational resilience, cyber risk, and systemic shocks. What steps should supervisors and financial institutions take to strengthen resilience in an increasingly complex environment?

Superintendent Peter Routledge:

• Cyber threats, geopolitical instability, and systemic shocks remind us that resilience has to be built into the DNA of financial institutions—not just in their balance sheets, but in their culture, governance, and day-to-day operations. And supervisors are looking for the readiness of institutions to face these risks – financially and operationally. Supervisors strive to assess institutions' resilience to operational risk events, cyber threats, and systemic shocks.
• The future of supervision is not only about spotting risks, but about building the capacity of supervisors to adapt when risks emerge. Effective supervision depends on judgment, collaboration, and the courage to act early, even when information is incomplete.
• To my earlier point, buying insurance for financial resilience is far more affordable in times of economic stability than during periods of crisis. Following the COVID-19 pandemic, OSFI undertook new regulatory action. The opportunity to strengthen the system was clear, and we acted decisively. Today, thanks to those measures, the Canadian financial system is as resilient as it has ever been.
• Supervisors must also embrace a culture of continuous learning. Canada's long-standing principles-based foundation remains strong, but today's complexity demands broader skills — the ability to connect financial, operational, integrity, and security risks into a single, coherent view.
• That's why the CFS designation is so important. It equips supervisors with the tools and mindset to carry forward a prudential culture that is forward-looking, rooted in trust, and able to sustain resilience through rapid change.

Moderator:

Canada has enjoyed financial stability for decades and it is now facing unprecedented challenges. OSFI recently announced a change in risk weightings to help spur market development. How do you ensure there is the right balance between responsible financial sector development and stability?

Superintendent Peter Routledge:

• We continue to assess where risk-based adjustments could have similar effects. Our focus is not on loosening standards but on ensuring diligence and proportionality in how risks are treated.
• As we would with any major policy shift, OSFI will examine whether current risk weighting adjustments can be made without compromising financial resilience. OSFI is not a "magic switch" to boost Canada, but it could possibly be a helpful enabler.
• We need to carefully examine whether current risk weights are unintentionally discouraging certain types of investments. While adjustments to risk weights can help address historical biases and influence outcomes at the margins, this alone will not be sufficient. Achieving meaningful change will require a broader set of policy tools to effectively shift institutions' focus.
• Any potential changes would be subject to a rigorous public consultation process through CAR 2027.
• Banks have ample capacity to help fund the country's adjustment to this new era. 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.

Moderator:

If you were to give one piece of advice to the next generation of supervisors — including our new CFS graduates — about preparing for the challenges ahead, what would it be?

Superintendent Peter Routledge:

• If I could sum it up in one sentence: integrity in judgment, urgency in action, and grit when it gets hard — that's what will make you an effective supervisor.
• Supervision is a public trust. You're here to protect Canadians and support a resilient financial system. Much of your best work will happen out of the spotlight, with little public recognition — but that's the nature of this calling. The system works because supervisors do the right thing, even when no one is watching.
• Lead with integrity and urgency. When something feels wrong, name it. When a risk is emerging, act early. Our environment moves fast, and supervisors can't be passive observers. Integrity keeps us grounded; urgency keeps us effective.
• Have grit — this work isn't easy. There will be moments of resistance, pressure, or fatigue. But perseverance is part of our craft. What you do quietly, consistently, and with conviction can prevent real harm and preserve confidence in the financial system.
• Remember: outcomes matter. Tools, frameworks, and data are essential — but judgment is what defines you. Your ultimate success will be measured by whether institutions are safer, stronger, and better prepared because you stepped in at the right moment.