Key principles of supervision
The following key principles help guide us as we follow our mandate.
Our work is risk-based
As supervisors, we make risk-based decisions all the time. We consider size, complexity, and potential impacts to the financial system. We intensify our supervision when we identify risks that could impact safety and soundness or pension-related rights and benefits.
We form views about risk through many activities, including by analyzing data and other information. We rely on the work of external auditors. Where appropriate, we also use the work of oversight functions to avoid duplication of effort.
We rely on sound judgment and diversity of thought
We use professional judgment supported by evidence in our work.
Diversity of thought brings new perspectives that may uncover hidden risks and lead to better outcomes.
We’re forward-looking and ready to act
Our risk assessments are forward-looking, and we take prompt action to address areas of concern. The framework helps us respond quickly to changes in risks.
We often need to make decisions with imperfect information. Our bias towards action means that we accept the risk of engaging too early. This is better than being slow to act. Our quick action helps contribute to public confidence in the Canadian financial system.